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ELSS Mutual Funds

ELSS stands for Equity Linked Savings Scheme. It is an instrument of a long-term capital asset for saving income tax in India. Not all ELSS plans are the same, and they do not necessarily fit in with everyone’s investment objectives and risk appetite. Therefore, you must invest in a scheme that fits with your risk profile and financial goals.

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ELSS Mutual Funds List

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logo SBI Long Term Equity Fund - Direct Growth

13.38%

Fund Size (Cr.) - 25,724

Invest
logo Motilal Oswal ELSS Tax Saver Fund-Dir Growth

18.06%

Fund Size (Cr.) - 3,405

Invest
logo HDFC ELSS Tax Saver Fund - Direct Growth

14.97%

Fund Size (Cr.) - 14,671

Invest
logo ITI ELSS Tax Saver Fund - Direct Growth

9.89%

Fund Size (Cr.) - 343

Invest
logo ICICI Pru Long Term Wealth Enhancement Fund-DirGrowth

9.66%

Fund Size (Cr.) - 36

Invest
logo DSP ELSS Tax Saver Fund - Direct Growth

19.77%

Fund Size (Cr.) - 14,981

Invest
logo Franklin India ELSS Tax Saver Fund - Direct Growth

12.31%

Fund Size (Cr.) - 5,986

Invest
logo Parag Parikh ELSS Tax Saver Fund - Direct Growth

15.88%

Fund Size (Cr.) - 4,477

Invest
logo JM ELSS Tax Saver Fund - Direct Growth

15.39%

Fund Size (Cr.) - 167

Invest
logo SBI Long Term Advantage Fund - Series V -Dir Growth

30.69%

Fund Size (Cr.) - 316

Invest
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Who Should Invest in ELSS Mutual Funds?

ELSS funds are appropriate for taxpayers prepared to take the risk of an equity-oriented tax-saving device. Because they have a consistent source of income and must make tax-saving investments every year, ELSS funds are better suited for the salaried class. In reality, they can profit from rupee cost averaging by investing in ELSS through SIP monthly. View More

If you are a young taxpayer, you can take advantage of the dual benefit of investing in ELSS, namely the tax deduction under Section 80C and the long-term growth potential of equities, by investing in ELSS yearly. While senior taxpayers can invest in ELSS to take advantage of the tax benefits, the equity risk inherent in ELSS necessitates a longer investment horizon, which they may lack.

Keep in mind that ELSS funds have a 3-year lock-in period.

If you invest now, you cannot withdraw your money until three years have passed if you made a lump sum investment.

Each SIP payment is also subject to the lock-in term.

You must wait until the final SIP instalment has finished three years if you wish to withdraw the entire money invested over 12 months.

However, to experience the true growth potential an ELSS can provide, you must continue with your investments after the lock-in period has passed.

Compared to someone who may be close to retirement, a young taxpayer with many years of productive work ahead of them is better able to make use of the dual benefits of an ELSS.

However, ELSS may be an alternative to examining if a person has the appropriate risk tolerance and still has five to seven years till retirement.

Therefore, ELSS may be your preferred alternative for tax savings, depending on your age, risk tolerance, and other obligations like home and student loan debt that make the previous tax system more suitable for you.

Popular ELSS Mutual Funds

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 25,724
  • 3Y Return
  • 25.11%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 3,405
  • 3Y Return
  • 24.87%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 14,671
  • 3Y Return
  • 22.97%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 343
  • 3Y Return
  • 21.47%

  • Min SIP Investment Amt
  • ₹ -
  • AUM (Cr.)
  • ₹ 36
  • 3Y Return
  • 20.45%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 14,981
  • 3Y Return
  • 19.84%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 5,986
  • 3Y Return
  • 19.46%

  • Min SIP Investment Amt
  • ₹ ₹ 1000
  • AUM (Cr.)
  • ₹ 4,477
  • 3Y Return
  • 19.05%

  • Min SIP Investment Amt
  • ₹ ₹ 500
  • AUM (Cr.)
  • ₹ 167
  • 3Y Return
  • 18.80%

  • Min SIP Investment Amt
  • ₹ -
  • AUM (Cr.)
  • ₹ 316
  • 3Y Return
  • 18.43%

FAQs

ELSS funds provide up to INR 1,50,000 tax deductions under Section 80C of the Income Tax Act, 1961. It helps you save up to INR 46,000 a year in taxes.

ELSS funds are appropriate for taxpayers prepared to take the risk of an equity-oriented tax-saving device. Because they have a consistent source of income and must make tax-saving investments every year, ELSS funds are better suited for the salaried class.

If you are a young taxpayer, you can take advantage of the dual benefit of investing in ELSS, namely the tax deduction under Section 80C and the long-term growth potential of equities, by investing in ELSS every year. While senior taxpayers can invest in ELSS to take advantage of the tax benefits, the equity risk inherent in ELSS necessitates a longer investment horizon, which they may lack.

ELSS funds have a 3-year lock-in period. If you invest now, you cannot withdraw your money until three years have passed if you made a lump sum investment.

Each SIP payment is also subject to the lock-in term.

You must wait until the final SIP instalment has finished in three years if you wish to withdraw the entire money invested over 12 months.

Some factors that need to be considered before investing in ELSS Funds are investment horizon, returns, lock-in term, and the annual tax exemption limit.

Tax saving mutual funds, also known as ELSS funds, are mutual funds that help save income tax on the profit gained from selling units of mutual funds at the end of a particular year or after a specific period. The government has announced various incentives for investors to save taxes on the capital gain from selling mutual funds units. Commonly people invest their money in mutual funds schemes since it helps save taxes on capital gains made every year. There are three types of mutual fund schemes eligible for saving taxes: equity, debt, and hybrid oriented funds.

Several types of mutual funds are available in India, including dividend funds, index funds, growth funds, etc. ELSS or Equity Linked Savings Scheme is one of the investment options offered by mutual fund companies in India.

The main difference between tax saving mutual funds and equity-linked savings schemes is that the former is a must for income tax purposes while the latter can be a part of a long-term financial plan.

Equity Linked Savings Scheme (ELSS) works like an insurance scheme. The invested money goes into a non-linked insurance fund, and the interest earned on this investment is tax-free. This interest is credited at the end of every year and is called ‘equated monthly instalment’. There is no upper or lower limit for investment in ELSS lock in period. And every individual is eligible to purchase these funds.

Investors can save on taxes by investing in ELSS funds if they do not claim deductions on their annual income return. ELSS funds are so-called because they provide an exemption from capital gains tax on investments made through them, unlike other mutual funds where long term capital gains are taxed at 15%. So these funds are also called funds that allow ‘tax-free’ growth over three years or more depending upon the fund you choose to invest in.

There are many ELSS funds available in the market today. But choosing the best ELSS fund with the ELSS tax benefit is not an easy task. You need to do your homework and select the best ELSS fund for you. Here is a guide to help you find the best ELSS fund for you:

Review the past performance of over 1, 3 and 5 years before investing.
Choose a fund with consistently higher returns and lower volatility. The riskier the fund, the more volatile its returns are likely to be.

The fund should be managed by an experienced fund manager who has a good track record of consistently beating benchmark returns. The fund should have a low expense ratio. It should have standard tracking error and high liquidity.

Choose a diversified ELSS fund with a long track record of consistent performance. Always check the past performance of the scheme before investing in it.

Under section 80C of the IT Act, the tax benefit offered by investing in ELSS tax saving funds is 50% of your investment, capped at Rs 1,50,000 for a financial year. This means that this amount reduces your taxable income and your tax liability. Any amount invested over and above the limit of Rs 1,50,000 will not attract any tax benefit.

The interest earned on fund corpus is another tax benefit. Since you invest in equity-oriented mutual funds, the expected return should be higher than fixed income products like Public Provident Fund (PPF). The interest earned on the corpus is entirely tax-free.

There are many tax saving mutual funds in India where you can invest to save taxes. But which is the best ELSS or other tax-saving mutual fund option in India? Well, there is no one-size-fits-all answer. It depends on a lot of factors such as your investment horizon, risk appetite and so on.

There are many tax-saving investment options under Section 80C of the Income Tax Act. The most popular ones are ELSS, NPS, PPF, Mutual Funds, Sukanya Samriddhi Account and Fixed Deposits. Tax saving mutual funds are a great way to save for retirement and other financial goals.

These funds offer significant tax breaks and provide liquidity, two of the main benefits of investing in mutual funds. However, when choosing a tax-saving mutual fund, your best bets are equity-oriented balanced funds with large fund sizes.

Tax saving mutual funds are a great way to save on taxes. They provide a way to invest in equity and debt instruments to earn you good returns while reducing your tax liability. We have tried to do a comprehensive analysis of all the popular ELSS funds in India and help you pick the best ELSS fund for you.

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