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Best Tax Saving Investments For 2023

Updated on September 21, 2023 , 8603 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 2023

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2022 (%)
HDFC Long Term Advantage Fund Growth ₹595.168
↑ 0.28
₹1,3181.215.435.520.617.4
Motilal Oswal Long Term Equity Fund Growth ₹31.6147
↑ 0.18
₹2,50010.41821.223.911.71.8
BOI AXA Tax Advantage Fund Growth ₹113.96
↑ 0.25
₹84110.617.319.124.214.8-1.3
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
31 Aug 18₹10,000
31 Aug 19₹9,445
31 Aug 20₹9,580
31 Aug 21₹15,168

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
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
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. Motilal Oswal Long Term Equity Fund

(Erstwhile Motilal Oswal MOSt Focused Long Term Fund)

The investment objective of the Scheme is to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity related instruments. However, there can be no assurance or guarantee that the investment objective of the Scheme would be achieved.

Motilal Oswal Long Term Equity Fund is a Equity - ELSS fund was launched on 21 Jan 15. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 14.4% since its launch.  Return for 2022 was 1.8% , 2021 was 32.1% and 2020 was 8.8% .

Below is the key information for Motilal Oswal Long Term Equity Fund

Motilal Oswal Long Term Equity Fund
Growth
Launch Date 21 Jan 15
NAV (22 Aug 23) ₹31.6147 ↑ 0.18   (0.58 %)
Net Assets (Cr) ₹2,500 on 31 Jul 23
Category Equity - ELSS
AMC Motilal Oswal Asset Management Co. Ltd
Rating Not Rated
Risk Moderately High
Expense Ratio 1.68
Sharpe Ratio 1.52
Information Ratio 0
Alpha Ratio 7.35
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
31 Aug 18₹10,000
31 Aug 19₹9,211
31 Aug 20₹9,177
31 Aug 21₹15,025
31 Aug 22₹14,691
31 Aug 23₹17,778

Motilal Oswal Long Term Equity Fund 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 Motilal Oswal Long Term Equity 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 1.5%
3 Month 10.4%
6 Month 18%
1 Year 21.2%
3 Year 23.9%
5 Year 11.7%
10 Year
15 Year
Since launch 14.4%
Historical performance (Yearly) on absolute basis
YearReturns
2022 1.8%
2021 32.1%
2020 8.8%
2019 13.2%
2018 -8.7%
2017 44%
2016 12.5%
2015
2014
2013
Fund Manager information for Motilal Oswal Long Term Equity Fund
NameSinceTenure
Aditya Khemani6 Sep 193.99 Yr.
Rakesh Shetty22 Nov 220.78 Yr.

Data below for Motilal Oswal Long Term Equity Fund as on 31 Jul 23

Equity Sector Allocation
SectorValue
Financial Services28.6%
Consumer Cyclical25.94%
Health Care18.15%
Industrials14.22%
Technology6.91%
Basic Materials5.98%
Asset Allocation
Asset ClassValue
Cash0.2%
Equity99.8%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
Trent Ltd (Consumer Cyclical)
Equity, Since 31 Aug 22 | 500251
8%₹202 Cr984,263
Infosys Ltd (Technology)
Equity, Since 31 Aug 20 | INFY
7%₹175 Cr1,220,000
Global Health Ltd (Healthcare)
Equity, Since 30 Nov 22 | MEDANTA
6%₹160 Cr2,248,356
ICICI Bank Ltd (Financial Services)
Equity, Since 30 Nov 18 | ICICIBANK
6%₹144 Cr1,506,000
Mankind Pharma Ltd (Healthcare)
Equity, Since 31 May 23 | 543904
5%₹128 Cr710,050
↓ -731
Fortis Healthcare Ltd (Healthcare)
Equity, Since 31 Aug 21 | 532843
5%₹125 Cr3,767,595
Cholamandalam Investment and Finance Co Ltd (Financial Services)
Equity, Since 31 Oct 19 | CHOLAFIN
5%₹123 Cr1,093,797
↑ 443,000
InterGlobe Aviation Ltd (Industrials)
Equity, Since 31 Jul 23 | INDIGO
5%₹115 Cr471,486
↑ 325,880
Titan Co Ltd (Consumer Cyclical)
Equity, Since 31 Oct 22 | TITAN
5%₹114 Cr368,000
The Federal Bank Ltd (Financial Services)
Equity, Since 30 Sep 22 | FEDERALBNK
4%₹109 Cr7,538,709

3. BOI AXA Tax Advantage Fund

The Scheme seeks to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities across all market capitalisations. The Scheme is in the nature of diversified multi-cap fund. The Scheme is not providing any assured or guaranteed returns.(There can be no assurance that the investment objectives of the Scheme will be realized.)

BOI AXA Tax Advantage Fund is a Equity - ELSS fund was launched on 25 Feb 09. It is a fund with Moderately High risk and has given a CAGR/Annualized return of 18.3% since its launch.  Ranked 13 in ELSS category.  Return for 2022 was -1.3% , 2021 was 41.5% and 2020 was 31.2% .

Below is the key information for BOI AXA Tax Advantage Fund

BOI AXA Tax Advantage Fund
Growth
Launch Date 25 Feb 09
NAV (22 Aug 23) ₹113.96 ↑ 0.25   (0.22 %)
Net Assets (Cr) ₹841 on 31 Jul 23
Category Equity - ELSS
AMC BOI AXA Investment Mngrs Private Ltd
Rating
Risk Moderately High
Expense Ratio 2.49
Sharpe Ratio 1.32
Information Ratio 0.33
Alpha Ratio 5.62
Min Investment 500
Min SIP Investment 500
Exit Load NIL

Growth of 10,000 investment over the years.

DateValue
31 Aug 18₹10,000
31 Aug 19₹8,612
31 Aug 20₹10,360
31 Aug 21₹17,548
31 Aug 22₹17,437
31 Aug 23₹20,231

BOI AXA Tax 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 ₹436,710.
Net Profit of ₹136,710
Invest Now

Returns for BOI AXA Tax 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 1.8%
3 Month 10.6%
6 Month 17.3%
1 Year 19.1%
3 Year 24.2%
5 Year 14.8%
10 Year
15 Year
Since launch 18.3%
Historical performance (Yearly) on absolute basis
YearReturns
2022 -1.3%
2021 41.5%
2020 31.2%
2019 14.6%
2018 -16.3%
2017 57.7%
2016 -1.2%
2015 2.1%
2014 44%
2013 9.1%
Fund Manager information for BOI AXA Tax Advantage Fund
NameSinceTenure
Alok Singh27 Apr 221.35 Yr.

Data below for BOI AXA Tax Advantage Fund as on 31 Jul 23

Equity Sector Allocation
SectorValue
Financial Services34.39%
Industrials13.46%
Basic Materials9.36%
Consumer Cyclical8.78%
Consumer Defensive8.62%
Health Care8.02%
Utility5.61%
Technology4.23%
Energy3.57%
Real Estate3.23%
Asset Allocation
Asset ClassValue
Cash0.66%
Equity99.28%
Debt0.06%
Top Securities Holdings / Portfolio
NameHoldingValueQuantity
State Bank of India (Financial Services)
Equity, Since 31 Oct 21 | SBIN
5%₹42 Cr740,000
HDFC Bank Ltd (Financial Services)
Equity, Since 31 Dec 10 | HDFCBANK
5%₹41 Cr264,000
↓ -62,000
Bank of Baroda (Financial Services)
Equity, Since 31 Oct 22 | 532134
4%₹31 Cr1,650,000
↑ 525,000
Power Finance Corp Ltd (Financial Services)
Equity, Since 31 Mar 23 | 532810
3%₹29 Cr1,110,000
Canara Bank (Financial Services)
Equity, Since 31 Aug 22 | 532483
3%₹29 Cr895,000
NTPC Ltd Shs Dematerialised (Utilities)
Equity, Since 30 Apr 22 | 532555
3%₹28 Cr1,260,000
ICICI Bank Ltd (Financial Services)
Equity, Since 31 Oct 18 | ICICIBANK
3%₹25 Cr260,000
↓ -65,000
Union Bank of India (Financial Services)
Equity, Since 31 Dec 22 | UNIONBANK
3%₹23 Cr2,725,875
↑ 1,135,875
Sun Pharmaceuticals Industries Ltd (Healthcare)
Equity, Since 30 Jun 22 | SUNPHARMA
3%₹22 Cr201,000
↑ 24,000
Reliance Industries Ltd (Energy)
Equity, Since 30 Nov 18 | RELIANCE
3%₹22 Cr91,009

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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