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Best risk-free tax-saving mutual fund

If you have any mutual fund queries, message on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.

ET Online|
Updated: May 25, 2019, 01.15 PM IST
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Can you recommend me something for tax saving - the best risk-free investment in mutual fund?
--Ankur Arora

Tax-saving or tax-planning mutual funds or Equity Linked Saving Schemes (ELSS) qualify for tax deductions under Section 80C of the Income Tax Act. Investments in these mutual funds qualify for tax deductions of up to Rs 1.5 lakh in a financial year. However, these schemes are not risk-free as they invest mostly in stocks. Investing in stocks always has some risk element in it. And stocks can be highly risky and volatile in the short term. However, stocks have the potential to offer superior returns over a long period.

In short, if you are ready to take risk and have an investment horizon of at least five to seven years, you may consider investing in ELSS or tax-saving mutual fund schemes. Though these schemes have a mandatory lock-in period of only three years, you must invest in them with a longer investment horizon.

Here are our recommended ELSS funds: Best ELSS or tax-saving mutual funds to invest in 2019

(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)

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