March 31 Tax Deadline: This ELSS Fund Saves Tax & Delivering Positive Returns Since 2019

As the financial year draws to a close, individuals rush to optimise their tax liabilities and explore tax-saving instruments under Section 80C of the Income Tax Act. The old tax regime allows deductions of up to ₹1.5 lakh per annum, making tax-saving investments a strategic move to reduce taxable income.

One of the most popular choices among investors is Equity Linked Savings Schemes (ELSS). These mutual funds not only help in tax savings but also provide an opportunity for long-term wealth creation due to their exposure to equity markets.

Performance Insights: How This ELSS Funds Have Fared

When selecting an ELSS fund, historical performance can provide insights into its consistency. One such fund that has consistently delivered positive returns, even during turbulent market phases, is the Motilal Oswal ELSS Tax Saver Fund.

Performance Overview of Motilal Oswal ELSS Tax Saver Fund

This data showcases resilience even during challenging periods, such as the 2020 pandemic. While past performance does not guarantee future returns, it provides a perspective on fund stability.

Motilal Oswal ELSS Tax Saver Fund: Fund Details

• Investment Objective: The fund aims to generate long-term capital appreciation by investing in a diversified portfolio of equity and equity-related instruments.
• Lock-in Period: 3 years (mandatory)
• Minimum Investment: ₹500 (both lumpsum and SIP)

Understanding ELSS: Tax Saving with Market Exposure

ELSS funds are diversified equity mutual funds that offer tax benefits under Section 80C. They come with a mandatory lock-in period of 3 years, making them the most liquid option among other tax-saving instruments like PPF or NSC.

Key Features of ELSS Funds:

✔ Tax Deduction: Investments up to ₹1.5 lakh qualify for tax deductions under Section 80C.
✔ Market-Linked Returns: Unlike fixed-income tax-saving instruments, ELSS funds invest in equities, making them subject to market fluctuations.
✔ Shorter Lock-in Period: Compared to PPF (15 years) and NSC (5 years), ELSS has the shortest lock-in period of three years.
✔ Growth Potential: Historically, ELSS funds have delivered better returns compared to other tax-saving options.

Final Thoughts

With March 31 fast approaching, investors exploring tax-saving options under Section 80C might consider ELSS funds as they provide a blend of tax efficiency and potential market-linked growth. However, it is important to evaluate investment goals, risk tolerance, and fund performance before making any decision.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.