Is it a good idea to invest in ELSS funds now to save taxes?

Right now, is investing in ELSS funds a good idea for tax savings? If yes, please suggest which ELSS fund is the best option to save taxes and make money.
-Kousik Lahiri

Investments in ELSS or tax saving mutual fund schemes help you to save taxes of up to Rs 1.5 lakh under Section 80C. However, these schemes are risky as they invest in stocks and the market has lost heavily in the last weeks due to Coronavirus pandemic. So, your question is extremely relevant. The market seems to be falling every other day. In such a scenario, does it make sense to invest in equity mutual funds, including tax saving mutual funds.

You can approach the issue in two different ways. One, the market has already lost around 30% and it offers you a good entry point to invest with a long investment horizon. Another way to look at it is since the market is likely to fall further, you should wait for it to hit the bottom. The trouble with the strategy is that it is never easy to predict the bottom. It might cost you an opportunity to make money.If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.




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