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Best ICICI ELSS Tax Saver Mutual Funds

ICICI PRUDENTIAL AMC offers 39 Tax Saver Mutual Fund with a total AUM belonging to Rs 512,982 crores as on November 2022 . With the best elss tax saving fund and an investor can claim up to Rs 1.5 lakhs as a tax deduction against their investments under section 80C.

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Best ICICI Prudential Tax Saver Mutual Funds to Invest in 2022

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Till Date CAGR
ICICI Prudential Long Term Equity Fund Tax Saving (G)
ICICI Prudential Long Term Equity Fund Tax Saving (G)

17%

19.4%

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Who Should Invest in ICICI Tax Saver Mutual Fund?

ICICI Prudential Long Term Equity Fund Tax Saving (Growth) or ELSS is an equity-oriented mutual fund that invests in equity securities listed on the stock exchange. Hence, Tax Saver Mutual Funds are suitable for investors looking for long-term wealth creation and tax saving purposes. This fund is eligible for tax deduction up to Rs 1.5 lakhs under Section 80C of the Income Tax Act, 1961. However, investors must understand that ELSS funds come with a lock-in period of 3 years. Also, tax saving should not be the only reason to invest in ICICI tax saving mutual fund schemes. Moreover, the ICICI tax saving fund is not suitable for investors looking for regular income and liquidity in the form of a zero lock-in period. 

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Things To Consider Before Investing in ICICI Tax Saver Mutual Fund

  • Investment Objective: ICICI Tax Saver Mutual Fund is an open-ended equity scheme with an investment objective of delivering long-term wealth creation and tax saving. The scheme provides tax benefits under section 80C of the Income Tax Act, 1961. However, investors must identify their investment goal and align it with the fund objective to create wealth during the period. 
  • Investment Strategy: ICICI Tax Saver Mutual Fund invests in a diversified portfolio of companies with growth potential and sustainable business models with a long-term perspective. The fund managers of ICICI Tax Saver Schemes will evaluate the fundamentals of the businesses while selecting the stocks of companies. Also,  the objective of the fund is to employ sufficient measures to minimise and control the risks involved in building a portfolio. Therefore, aligning investors’ long term strategy with the fund strategy is essential. 
  • Associated Risks: ICICI mutual fund’s Tax Saving schemes have certain risks associated with them. The investment value may go up or down depending on the numerous circumstances and forces affecting the capital and money markets. Also, the principal amount will be at a very high risk. ICICI Tax Saver Fund has the potential to deliver higher returns against the associated risks involved. Therefore, it is crucial to understand these associated risks before investing in this scheme. 

Tax on ICICI Tax Saver Mutual Funds

The tax treatment of ICICI Tax Saver Mutual Fund is similar to that of an equity mutual fund. The returns earned on the ICICI Tax Saver fund are taxable at the time of redemption. The taxation of capital gains depends on the period of holding. On the sale of units of ICICI Tax Saver Mutual Fund before 12 months, a short-term capital gain arises. However, STCG is not applicable due to the lock-in period. A long-term capital gain will arise on redemption after 12 months from the date of allocation of these units. As per the law, LTCG of up to Rs 1 lakh is tax exempt. Any LTCG on the ICICI Tax Saving Mutual Fund scheme is taxable at 10% above the exemption limit. 

Recommended: To visit and learn more about Tax on Mutual Funds