Does ELSS gives better returns as returns are not taxed unlike other MF’s ?

POSTED BY astrosunil ON March 9, 2014 6:50 pm COMMENTS (3)

Hello,

Can you please suggest me to Hold/Sell the following MF ? Investing from Sep 2007, monthly Rs 1500 in each of the for below ones

1] HDFC TaxSaver-Dividend Plan
2] Principal Personal Tax Saver Fund
3] SBI MAGNUM TAXGAIN SCHEME 1993 – REGULAR PLAN – DIVIDEND
4] SBI MAGNUM TAXGAIN SCHEME 1993 – REGULAR PLAN- GROWTH

I need to invest 5K to complete my 1L under 80C this year, also mainly start with correct set of mutual funds for next year. plan to invest approx 5K monthly in MF/ELSS.

Second question is : As ELSS are EEE – exempt when matured, can we roughly tell that ELSS gives better returns as returns are not taxed unlike other MF’s ??

Thanks,
Sunil

3 replies on this article “Does ELSS gives better returns as returns are not taxed unlike other MF’s ?”

  1. ashalanshu says:

    Dear Sunil, thanks for understanding the same.

    Thanks

    Ashal

  2. astrosunil says:

    Thanks Ashal, I thought diversification will reduce the risk & hence invested in multiple ELSS. ok, I has misunderstood that only ELSS are tax exempt when we redeem after 3 years. Now I am clear that if we redeem Equity Mutual fund after holding for 1 yr, that would be considered as long term capital gains tax which is zero for equity MF.

  3. ashalanshu says:

    Dear Sunil, why are you investing in 4 different (actually 3) ELSS? Please opt only from from the current list and invest in that fund only. Eq. MFs be it ELSS or normal Eq. funds are tax free if holding period is more than 1Y. If you factor in the tax benefit available at the time of investment under section 80C, yes ELSS may look better but do remember that ELSS also carries the risk of Eq. investing.

    Thanks

    Ashal

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