Should I invest in ELSS or invest in a scheme without any tax benefit?

I would like your advice on my MF-related investment dilemma. Kindly provide your insights on the same. I would like to do Rs 2,500 monthly SIP for a term of seven years. I am not sure which SIP to use for reaping the maximum return. I felt that any healthy ELSS plan shall serve the purpose. But is there a choice better enough to ignore the three-year tax advantage? That is, if the returns are higher enough, why not ignore the fear of 20 per cent tax slab and do a trade-off? Kindly advise.
--Sathyan Parameshwaran R

Do you want to save taxes under Section 80C of the Income Tax Act? If yes, then you should invest in Equity Linked Savings Schemes or ELSSs. Investments in these tax-saving mutual fund schemes can help you to save taxes of up to Rs 1.5 lakh.

Have you already taken care of Rs 1.5 lakh tax deduction permitted under Section 80C? If yes, you can invest in any other mutual fund scheme.


There is no justification to let go of the tax deduction available for investing in ELSS, as the category has proven their worth by providing excellent returns over the long period. That is why they are considered ideal for creating wealth over a long period.

Here are our recommended equity mutual fund SIP portfolios: Best mutual funds to invest in 2017. You may choose a portfolio in line with your risk tolerance.