Best ELSS (Tax Saving) Mutual Funds 2026
ELSS (Tax Saving) funds offer ₹1.5L tax deduction under Section 80C with 3-year lock-in — best tax-saving investment. 157 funds available on TopFund.
11.05%
Avg 3Y CAGR
What are ELSS (Tax Saving) Mutual Funds?
ELSS (Equity Linked Savings Scheme) is the only mutual fund category that doubles as a Section 80C tax-saving instrument — investments up to ₹1.5 lakh in a financial year are deductible from taxable income, which can save up to ₹46,800 in tax for someone in the 30% bracket (including cess). What sets it apart from other 80C options like PPF (15-year lock-in) or tax-saving FDs (5-year lock-in) is the shortest lock-in of the lot: just 3 years per investment.
It's important not to mistake the lock-in for safety, though — ELSS portfolios are typically run like a flexi-cap or multi-cap fund underneath, investing across large, mid, and small cap stocks, so full market risk applies for the entire 3 years and beyond. The lock-in only restricts withdrawal; it does nothing to cushion drawdowns. Each SIP installment into an ELSS fund is individually locked for 3 years from its own investment date, not from when you started the SIP — so a 5-year SIP means your last installment is locked until year 8.
After the 3-year lock-in ends, ELSS units are taxed exactly like any other equity fund: gains above ₹1 lakh in a financial year are taxed at 12.5% LTCG if held over a year (which they always are, given the lock-in), with no further special treatment.
Top ELSS (Tax Saving) Funds by Star Rating
Motilal Oswal ELSS Tax Saver Fund - Direct Plan - Growth Option
Motilal Oswal Mutual Fund · ELSS
WhiteOak Capital ELSS Tax Saver Fund Direct Plan IDCW
WhiteOak Capital Mutual Fund · ELSS
HDFC ELSS Tax saver - Growth Plan
HDFC Mutual Fund · ELSS
WhiteOak Capital ELSS Tax Saver Fund Regular Plan Growth
WhiteOak Capital Mutual Fund · ELSS
WhiteOak Capital ELSS Tax Saver Fund Regular Plan IDCW
WhiteOak Capital Mutual Fund · ELSS
HDFC ELSS Tax saver - IDCW Plan
HDFC Mutual Fund · ELSS
WhiteOak Capital ELSS Tax Saver Fund Direct Plan Growth
WhiteOak Capital Mutual Fund · ELSS
Motilal Oswal ELSS Tax Saver Fund - Regular Plan - Growth Option
Motilal Oswal Mutual Fund · ELSS
Motilal Oswal ELSS Tax Saver Fund - IDCW Payout
Motilal Oswal Mutual Fund · ELSS
Motilal Oswal ELSS Tax Saver Fund Direct - IDCW Payout
Motilal Oswal Mutual Fund · ELSS
Frequently Asked Questions
What are ELSS (Tax Saving) mutual funds?
ELSS (Tax Saving) mutual funds offer ₹1.5L tax deduction under Section 80C with 3-year lock-in — best tax-saving investment.
What is the minimum investment in ELSS (Tax Saving) funds?
Most ELSS (Tax Saving) funds allow SIP starting from ₹500/month or ₹1,000 lumpsum. Some funds have lower minimums of ₹100 via SIP.
Are ELSS (Tax Saving) mutual funds safe?
Equity mutual funds carry market risk — your investment value can go up or down with the market. They are suitable for long-term goals (5+ years) where temporary volatility is acceptable.
How are ELSS (Tax Saving) fund returns taxed?
Gains held for more than 1 year are Long Term Capital Gains (LTCG) — ₹1L exempt, 10% above that. Short-term gains (held < 1 year) are taxed at 15% (STCG).
Is ELSS better than PPF for tax saving?
It depends on risk appetite and horizon. ELSS has historically delivered higher returns than PPF over long periods since it's equity-based, but it comes with market risk and only a 3-year lock-in versus PPF's 15 years and guaranteed, risk-free returns. Many financial planners use both — PPF for the guaranteed debt portion of a portfolio, ELSS for the equity portion that also happens to save tax.
Can I withdraw my ELSS investment after 3 years, or does it auto-renew?
ELSS units become freely redeemable the day the 3-year lock-in ends — there's no auto-renewal or forced continuation. If you don't redeem, the units simply continue as regular open-ended equity fund units, fully liquid and no longer tax-locked.