ELSS or insurance: which is the best tax-saving option under Section 80C?

I need to invest Rs 1 lakh in tax saving mutual funds this month for FY 2018-19. My father used to take 80C deduction from LIC premium. Most of the policies matured this year. Is it good decision to invest in mutual funds instead of LIC policies? Suggest some good diversified tax saving mutual funds. Also best SIP (Rs 8,500 per month) plan for FY 2019-20
--Naveen Sharma

Shifali Satsangee, Founder, Funds Ve'eda, responds:

In comparison to other allowable investments for deduction under section 80C of the Income Tax Act, ELSS funds score over others because they bring in benefits of equity returns, low cost, transparency and the lowest lock-in period. However, if your need is for insurance, then go for a term plan. Similarly, if your need is for investments with tax savings, then invest in ELSS.


One should plan ahead by routing their investments in ELSS schemes through monthly SIPs throughout the year and avoid last minute rush into tax-saving investments late in the year.

You could invest in lumpsum for FY 2018-19 in:
Aditya Birla Sun Life Tax Relief 96: Rs 50,000
Invesco India Tax Plan: Rs 50,000

And start the SIPs in these schemes to save tax for the next financial year 2019-20.

ETMutualFunds.com adds: Here are our recommend Best ELSS to invest in 2019