Now It’s Time To Pick Up Parag Parikh ELSS Tax Saver to Earn Extra Money

Now It's Time To Pick Up Parag Parikh ELSS Tax Saver Fund.

The Parag Parikh ELSS Fund, launched on July 24, 2019, stands as a testament to the evolving landscape of tax-saving investment avenues in India. As millennials and investors alike seek opportunities for wealth creation coupled with tax efficiency, this fund emerges as a promising option. With an impressive asset size of ₹2,997 crore, it has garnered significant attention from both individuals and institutions since its inception.

Designed with a focus on fostering long-term capital appreciation, the fund adopts a diversified investment approach primarily centered around equity and equity-related instruments. A noteworthy aspect of this fund is its adherence to the guidelines outlined in the Equity Linked Saving Scheme, 2005, as specified by the Ministry of Finance. By allocating a significant portion, specifically 80% of its total assets, in accordance with these guidelines, the fund strategically positions itself to capitalize on potential growth opportunities while ensuring regulatory compliance.

In this era of financial complexities and dynamic market conditions, investors are increasingly seeking investment avenues that offer tax savings, transparency, flexibility, and potential for growth. The Parag Parikh ELSS Fund aims to address these needs by providing investors with a comprehensive investment solution that not only offers tax benefits but also aligns with their long-term financial objectives. As we delve deeper into the intricacies of this fund, we uncover its key benefits, limitations, and essential considerations for potential investors.

How good is the Parag Parikh ELSS Fund?

The Parag Parikh Mutual Fund, the tax saving fund that is The Parag Parikh ELSS Fund, which was introduced to the market on July 24, 2019, has seen substantial investor interest, accumulating assets of Rs. 2,997 crore. This indicates a significant level of confidence and investment from individuals and institutions since its inception.

The fund’s asset size is a key indicator of its popularity and success in attracting investor funds. A larger asset base can potentially indicate stability, credibility, and potential for growth. However, investors should conduct thorough research beyond just the asset size, considering factors such as the fund’s investment strategy, performance track record, risk profile, and management team expertise before making investment decisions.

Fund Objectives of this Parag Parikh Tax Saver

The Scheme is designed with the overarching objective of fostering long-term capital appreciation for investors. This is pursued through a diversified investment approach that primarily focuses on equity and equity-related instruments.

By allocating a significant portion, specifically 80% of its total assets, in accordance with the guidelines outlined in the Equity Linked Saving Scheme, 2005, as specified by the Ministry of Finance, the fund seeks to strategically position itself to capitalize on potential growth opportunities while also adhering to regulatory requirements.

This prudent allocation strategy is aimed at optimizing returns for investors while simultaneously ensuring compliance with applicable regulations, thereby enhancing the overall investment experience.

Key Benefits of PPFAS Tax Saver Fund:

Tax Savings

PPFAS Tax Saver Fund offers investors the opportunity to save tax under Section 80C of the Income Tax Act, 1961, by investing in the fund for a lock-in period of three years.

Long-Term Capital Appreciation

The fund aims to generate long-term capital appreciation for investors by investing in a diversified portfolio of equity and equity-related instruments.

Professional Management

Managed by experienced fund managers, PPFAS Tax Saver Fund benefits from the expertise and insights of investment professionals who aim to optimize returns while managing risks effectively.

Transparency and Accountability

PPFAS Tax Saver Fund prioritizes transparency and accountability, providing investors with regular updates, detailed reports, and insights into the fund’s investment decisions and performance.


Investors have the flexibility to invest in the PPFAS Tax Saver Fund through lump sum investments or systematic investment plans (SIPs), allowing them to align their investments with their financial goals and risk tolerance.


The fund invests across various sectors and market capitalizations, providing investors with diversification benefits and reducing the concentration risk associated with investing in a single asset class or sector.

Potential for Growth

With a focus on long-term wealth creation, the PPFAS Tax Saver Fund aims to deliver competitive returns over the investment horizon, helping investors achieve their financial goals.

In conclusion, the PPFAS Tax Saver Fund offers tax savings, long-term capital appreciation, professional management, transparency, flexibility, diversification, and potential for growth, making it an attractive investment option for investors seeking to build wealth while saving on taxes.

Limitations of investing in ELSS Funds:

Here are the limitations of the ELSS Fund

Lock-in Period

ELSS funds have a mandatory lock-in period of three years, which restricts investors from accessing their funds during this time, unlike other mutual funds that offer liquidity.

Market Risk

ELSS funds primarily invest in equities, making them susceptible to market volatility and fluctuations. Investors may experience losses if the market performs poorly during the investment period.

Limited Tax Benefits

While ELSS funds offer tax benefits under Section 80C of the Income Tax Act, the maximum deduction allowed is ₹1.5 lakh per financial year. Therefore, investments exceeding this limit do not provide additional tax benefits.

Single Investment Avenue

Investing in ELSS funds alone may not provide sufficient diversification as it focuses solely on equities. Investors may need to diversify their investment portfolio across different asset classes for better risk management.

Dependency on Fund Manager

The performance of ELSS funds depends on the fund manager’s ability to select and manage the portfolio effectively. Poor fund management decisions can negatively impact returns and investor confidence.

Market Timing Risk

Investing in ELSS funds requires timing the market correctly, as market conditions at the time of investment can significantly impact returns. Incorrect market timing may result in suboptimal returns or losses.

No Guaranteed Returns

ELSS funds do not guarantee returns or capital protection. The performance of the fund is subject to market conditions and the performance of the underlying securities in the portfolio.

Capital Gains Tax

While ELSS funds offer tax-free returns on investment, investors are liable to pay capital gains tax on profits made above ₹1 lakh in a financial year upon redemption after the completion of the lock-in period.

Exit Load

Some ELSS funds may charge exit loads if investors redeem their investment before the completion of the lock-in period, thereby reducing returns.

SIP Lock-in

Each SIP installment in ELSS funds comes with a lock-in period of three years from the respective investment date, restricting investors from redeeming SIP units until the completion of the lock-in period for each installment.

Points to Consider Before Investing

Financial Goals

Define your financial goals, whether it’s saving for retirement, buying a home, or funding education, and align your investment strategy accordingly.

Risk Tolerance

Assess your risk tolerance based on factors such as age, income, investment experience, and financial responsibility

Investment Horizon

Determine your investment horizon, whether it’s short-term, medium-term, or long-term, to choose suitable investment options.


Spread your investments across different asset classes, sectors, and geographical regions to reduce risk and enhance returns.


Conduct thorough research on investment options, including mutual funds, stocks, bonds, and other financial instruments, to make informed decisions.

Cost and Fees

Consider the costs and fees associated with investments, including expense ratios, brokerage fees, and transaction costs, to optimize returns.

Fund Performance

Analyze the historical performance of investment options, focusing on factors such as returns, volatility, and consistency, to gauge potential future performance.

Fund Manager Expertise

Evaluate the expertise and track record of fund managers managing mutual funds or other managed investment options.


Assess the liquidity of investments, considering your financial needs and the ease of converting investments into cash when required.

Tax Implications

Understand the tax implications of different investment options, including tax benefits, capital gains tax, and tax efficiency, to minimize tax liabilities and maximize returns.


In conclusion, investing in the Parag Parikh ELSS Fund offers an opportunity for tax savings, long-term capital appreciation, professional management, transparency, flexibility, diversification, and potential for growth.

However, it’s essential to consider the limitations of ELSS funds, such as the lock-in period, market risk, and dependency on fund managers, before making investment decisions. Before investing, it’s crucial to assess your financial goals, risk tolerance, and investment horizon, and conduct thorough research on investment options.

Consider factors such as cost and fees, fund performance, fund manager expertise, liquidity, and tax implications. Systematic Investment Plan (SIP) can be an effective strategy to invest regularly and achieve your financial goals over time.



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