InvestorQ : Do I invest in ELSS funds for the coming financial year?
Aishwarya Nimbalkar made post

Do I invest in ELSS funds for the coming financial year?

Nikita Damle answered.
3 years ago
Equity-Linked Savings Schemes (ELSS) are specialized mutual funds dealing in equity and providing specific tax benefits on both dividends and capital gains earned. ELSS schemes primarily invest in equity instruments of all kinds, depending upon the asset management company.

Under section 80C of the Income Tax Act of 1961, you can lower your tax liability by Rs 1.5 Lakh by investing in ELSS funds. ELSS Tax saving mutual funds comes with a lock-in period of three years. It is the lowest among all the tax-saving options that are available under Section 80C. If the fund is giving good returns then the investors may choose to continue. Redemption is not compulsory after a period of 3 years. It is only a minimum investment duration.

ELSS schemes allow you to invest systematically with as low as Rs. 500 per month. Your savings turn into your investments. This nurtures a habit of continuous investing. Since there’s a lock-in period of 3 years, if you start a SIP in Equity Linked Saving Schemes, the returns for your SIP amounts will be generated every month after 3 years of the first investment and the returns will be exempted from taxes.

ELSS Funds are fully transparent. If you have invested in any of the conventional tax saving instruments, then you must have noticed that they don’t show the securities in which they have invested in. But, this is not the case with ELSS mutual funds. You can easily check the stocks and sectors in which they have invested in and can guide your investments according to that. 
In my opinion, below are the five best ELSS Mutual Funds to invest for tax saving and long term wealth creation;

DSP Blackrock Tax Saver Fund
Invesco India Tax Plan
TATA India Tax Savings Fund
Axis Long Term Equity Fund
Birla Sun Life Tax Relief ’96 Fund