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Best Tax Saving Investments For 2022

Updated on October 3, 2022 , 6367 views

Looking for best tax saving investments? Don’t know how to save income tax? Tax saving can be easy if done in a correct manner. There are various smart ways to stay away from paying Taxes and save as much as possible. Generally, people indulge into Tax Planning when the financial year is about to end. But, does this ensure prudent investment planning? No! Investing in the early quarters of the financial year is a smarter approach instead. This ensures that you get time to plan your investment and avail the most out of it. Some of the tax saving investments include tax saving Mutual Funds ELSS, PPF, tax saving FD, NPS etc. a detailed list of tax saving investment options is mentioned below.

Some of the Best Investment Plan in India that are beneficial for tax saving include-

Tax-saving

Tax Saving ELSS Funds Or Equity Linked Savings Schemes

Tax saving is an ideal way of financial planning. ELSS Funds are tax saving schemes that are equity diversified and invest the major part of the fund corpus either in equities or equity-related instruments. Being Market-linked, equity-linked savings scheme or ELSS funds offer good returns. ELSS funds are tax saving Mutual Funds that offers tax deductions upto INR 1,50,000 under Section 80C of Income Tax Act.

As per the Budget 2018, ELSS would attract Long Term Capital Gains (LTCG). Investors would be taxed at 10% (with no indexation) under long term Capital Gain tax. Gains up to INR 1 lakh are free of tax. Tax at 10% applies to gains above INR 1 lakh.

Top 3 Tax Saving ELSS Funds 2022

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2021 (%)
HDFC Long Term Advantage Fund Growth ₹595.168
↑ 0.28
₹1,3181.215.435.520.617.4
Baroda Pioneer ELSS 96 Growth ₹68.6676
↑ 0.33
₹210-6.1-3.517.616.711.6
Kotak Tax Saver Fund Growth ₹73.378
↑ 1.43
₹2,93611.8-0.83.319.712.833.2
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 14 Jan 22
*Above is the list of Top 3 Tax Saving ELSS Mutual Funds sorted on last 1 year performance and have Net Assets between 100 - 5000 Crore.

1. HDFC Long Term Advantage Fund

To generate long term capital appreciation from a portfolio that is predominantly in equity and equity related instruments

HDFC Long Term Advantage Fund is a Equity - ELSS fund was launched on 2 Jan 01. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 21.4% since its launch.  Ranked 23 in ELSS category. .

Below is the key information for HDFC Long Term Advantage Fund

HDFC Long Term Advantage Fund
Growth
Launch Date 2 Jan 01
NAV (14 Jan 22) ₹595.168 ↑ 0.28   (0.05 %)
Net Assets (Cr) ₹1,318 on 30 Nov 21
Category Equity - ELSS
AMC HDFC Asset Management Company Limited
Rating
Risk Moderately High
Expense Ratio 2.25
Sharpe Ratio 2.27
Information Ratio -0.15
Alpha Ratio 1.75
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
30 Sep 17₹10,000
30 Sep 18₹10,744
30 Sep 19₹11,412
30 Sep 20₹10,757
30 Sep 21₹17,891

HDFC Long Term Advantage Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹470,047.
Net Profit of ₹170,047
Invest Now

Purchase not allowed

Returns for HDFC Long Term Advantage Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 14 Jan 22

DurationReturns
1 Month 4.4%
3 Month 1.2%
6 Month 15.4%
1 Year 35.5%
3 Year 20.6%
5 Year 17.4%
10 Year
15 Year
Since launch 21.4%
Historical performance (Yearly) on absolute basis
YearReturns
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Fund Manager information for HDFC Long Term Advantage Fund
NameSinceTenure

Data below for HDFC Long Term Advantage Fund as on 30 Nov 21

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

2. Baroda Pioneer ELSS 96

The main objective of the scheme is to provide the investor long term capital growth as also tax benefit under section 80C of the Income Tax Act, 1961.

Baroda Pioneer ELSS 96 is a Equity - ELSS fund was launched on 2 Mar 15. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 8.4% since its launch. .

Below is the key information for Baroda Pioneer ELSS 96

Baroda Pioneer ELSS 96
Growth
Launch Date 2 Mar 15
NAV (11 Mar 22) ₹68.6676 ↑ 0.33   (0.48 %)
Net Assets (Cr) ₹210 on 31 Jan 22
Category Equity - ELSS
AMC Baroda Pioneer Asset Management Co. Ltd.
Rating Not Rated
Risk Moderately High
Expense Ratio 2.55
Sharpe Ratio 2.51
Information Ratio -0.09
Alpha Ratio 5.69
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
30 Sep 17₹10,000
30 Sep 18₹9,582
30 Sep 19₹9,687
30 Sep 20₹9,709
30 Sep 21₹16,135

Baroda Pioneer ELSS 96 SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹405,518.
Net Profit of ₹105,518
Invest Now

Returns for Baroda Pioneer ELSS 96

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 14 Jan 22

DurationReturns
1 Month -3.9%
3 Month -6.1%
6 Month -3.5%
1 Year 17.6%
3 Year 16.7%
5 Year 11.6%
10 Year
15 Year
Since launch 8.4%
Historical performance (Yearly) on absolute basis
YearReturns
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
Fund Manager information for Baroda Pioneer ELSS 96
NameSinceTenure

Data below for Baroda Pioneer ELSS 96 as on 31 Jan 22

Equity Sector Allocation
SectorValue
Asset Allocation
Asset ClassValue
Top Securities Holdings / Portfolio
NameHoldingValueQuantity

3. Kotak Tax Saver Fund

The investment objective of the scheme is to generate longterm capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time.

Kotak Tax Saver Fund is a Equity - ELSS fund was launched on 23 Nov 05. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 12.5% since its launch.  Ranked 19 in ELSS category.  Return for 2021 was 33.2% , 2020 was 14.9% and 2019 was 12.7% .

Below is the key information for Kotak Tax Saver Fund

Kotak Tax Saver Fund
Growth
Launch Date 23 Nov 05
NAV (04 Oct 22) ₹73.378 ↑ 1.43   (1.98 %)
Net Assets (Cr) ₹2,936 on 31 Aug 22
Category Equity - ELSS
AMC Kotak Mahindra Asset Management Co Ltd
Rating
Risk Moderately High
Expense Ratio 2.15
Sharpe Ratio 0.26
Information Ratio 0.01
Alpha Ratio 0.57
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
30 Sep 17₹10,000
30 Sep 18₹10,237
30 Sep 19₹11,119
30 Sep 20₹11,371
30 Sep 21₹17,778
30 Sep 22₹18,366

Kotak Tax Saver Fund SIP Returns

   
My Monthly Investment:
Investment Tenure:
Years
Expected Annual Returns:
%
Total investment amount is ₹300,000
expected amount after 5 Years is ₹415,684.
Net Profit of ₹115,684
Invest Now

Returns for Kotak Tax Saver Fund

Returns up to 1 year are on absolute basis & more than 1 year are on CAGR (Compound Annual Growth Rate) basis. as on 14 Jan 22

DurationReturns
1 Month -0.8%
3 Month 11.8%
6 Month -0.8%
1 Year 3.3%
3 Year 19.7%
5 Year 12.8%
10 Year
15 Year
Since launch 12.5%
Historical performance (Yearly) on absolute basis
YearReturns
2021 33.2%
2020 14.9%
2019 12.7%
2018 -3.8%
2017 33.8%
2016 7.5%
2015 1.5%
2014 56.6%
2013 -6.3%
2012 36.2%
Fund Manager information for Kotak Tax Saver Fund
NameSinceTenure
Harsha Upadhyaya25 Aug 157.02 Yr.

Data below for Kotak Tax Saver Fund as on 31 Aug 22

Equity Sector Allocation
SectorValue
Financial Services26.95%
Industrials18.38%
Basic Materials16.03%
Consumer Cyclical11.21%
Technology7.33%
Consumer Defensive6.27%
Energy4.49%
Health Care4.02%
Communication Services1.75%
Utility0.89%
Asset Allocation
Asset ClassValue
Cash2.68%
Equity97.32%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 09 | ICICIBANK
8%₹240 Cr2,700,000
State Bank of India (Financial Services)
Equity, Since 28 Feb 21 | SBIN
5%₹159 Cr3,000,000
Reliance Industries Ltd (Energy)
Equity, Since 30 Jun 06 | RELIANCE
4%₹132 Cr500,000
Infosys Ltd (Technology)
Equity, Since 31 Dec 05 | INFY
4%₹119 Cr800,000
Larsen & Toubro Ltd (Industrials)
Equity, Since 28 Feb 14 | LT
4%₹111 Cr575,000
ITC Ltd (Consumer Defensive)
Equity, Since 31 Oct 21 | ITC
3%₹99 Cr3,100,000
Axis Bank Ltd (Financial Services)
Equity, Since 31 Mar 13 | 532215
3%₹98 Cr1,300,000
SRF Ltd (Basic Materials)
Equity, Since 30 Apr 16 | SRF
3%₹92 Cr360,000
↓ -10,000
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Jan 10 | HDFCBANK
3%₹82 Cr550,000
Tata Consultancy Services Ltd (Technology)
Equity, Since 30 Apr 18 | TCS
2%₹71 Cr221,398

PPF Or Public Provident Fund

PPF or Public Provident Fund is a tax-free investment option that is backed by the Central Government of India. PPF came into existence in 1968 by the Ministry of Finance. Public Provident Fund aims to provide financial security to people post-retirement. The government of India launched PPF in order to help people inculcate the habit of saving and also plan their retirement well in advance. PPF is one of the best tax saving investments as the interest earned on deposits are not taxable. Moreover, the investments are liable for tax deductions under section 80C of Income Tax Act.

Tax Saving FD Or Fixed Deposit

tax saving FD or Fixed Deposits are financial instruments that are provided by banks for a fixed period of time. The interest rate of FD varies from 4% to 8% (according to the investment tenure). Usually, it is seen that higher the period of investment higher is the rate of interest on FD and vice versa. Though FD is a tax saving and safe investment, the interest earned on them is fully taxable as per the Income Tax Act. Furthermore, if the rate of interest on FD is above INR 10,000, banks deduct a TDS @ 10% p.a.

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NPS Or National Pension Scheme

NPS or National Pension Scheme is a tax saving investment option formulated by the Central Government of India to help people save tax while saving for retirement. As per the National Pension Scheme, one can open a personal retirement account where they can save a pension corpus during their working life. Apart from Retirement planning, investments upto 50,000 under NPS are liable for deductions under section 80 CCD (1B). Under section 80C of Income Tax Act, tax deductions upto 1,50,000 are liable on investments in a National Pension Scheme. This makes NPS one of the best tax saving investments in India.

National Saving Certificate (NSC)

National Saving Certificate (NSC) is a good Tax Saving Scheme to invest in. NSC interest rates are set in the month of April every year. The current interest rate of NSC is 7.9% p.a. Investments up to INR 1,00,000 per year are eligible for IT rebate under the Section 80C of the Income Tax Act. You can invest in NSC through your local Post Office as well.

Employee Provident Fund (EPF)

Employee Provident Fund or EPF is typically deducted from the salary of an individual which includes 12% of their basic salary. The employer also contributes the similar percentage of which 3.7% goes to the EPF and the remaining 8.3% goes towards the pension fund. It is a defined benefit scheme with interest rates being set every year. The interest rate was 8.8% p.a. for the year 2015-2016. There is no tax at the time of making the investment in EPF. Also, the interest earned is also tax-free. At the time of retirement, individuals can withdraw the entire amount in the account.

ULIP Or Unit Linked Insurance Policy

Unit-linked insurance Policy is an insurance policy that works an insurance cover along with Offering market linked returns. Under a ULIP, some part of your investment is invested in Mutual Funds (Equity, Balanced or Debt fund) and the remaining is contributed towards your life cover. One can save tax by investing in ULIP under Sections 80C, 80CCC and 80D of the Income Tax Act. Moreover, the interests that are earned on your ULIP investment are tax-free. Also, under section 10 (10D), tax-free maturity benefits are available as well. When choosing an investment, people usually tend to choose it just to avail tax benefits. Ideally, the investors should look for certain factors before investing. Some of those include maximum tax saving, low-cost investment, substantial returns etc. So, understand the tax saving investments well and then invest.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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