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ELSS Mutual Funds

3 Year Average Returns

10.99%profit

Funds on Dhan

37


ELSS Funds are a type of Tax Saving Equity Fund that allows you to save tax while you invest for your long-term goals. These Funds are eligible for tax deduction under Section 80C of the Income Tax Act. While these are the best ELSS Mutual Funds to invest in, you must know these 3 things before you start investing.

  • Goal: ELSS Funds offer high growth potential and tax savings. These Funds can benefit from the price appreciation of the stocks and the tax exemption of up to Rs 1.5 lakh per year.
  • Investment Horizon: Suitable for investors looking for tax-saving options with a mandatory lock-in period of 3 years, offering a chance for wealth creation and tax saving.
  • Risk: These Funds carry market risk, given their equity exposure, but with tax benefits and the potential for substantial long-term growth.

Best ELSS Funds to Invest in 2026

Note: 3Y & 5Y returns are annualised. Rest everything is absolute.

Scheme
AUM (in Cr.)
Fund Age
1W
1M
3M
6M
1Y
3Y sort
5Y
₹ 4,89011 Yrs-2.71%-6.07%-3.43%-0.83%0.72%19.63%15.42%
₹ 24013 Yrs-2.23%-5.57%-2.74%4.17%-1.22%15.69%11.92%
₹ 4814 Yrs-0.67%-2.86%-3.26%2.14%-2.89%15.51%0.00%
₹ 3,97413 Yrs-1.95%-5.10%-4.50%-0.86%-3.04%15.23%11.51%
₹ 13,10313 Yrs-0.92%-4.05%-4.11%1.98%3.45%14.54%13.26%
₹ 4457 Yrs-3.46%-8.26%-7.59%-3.80%-6.68%13.99%10.81%
₹ 85713 Yrs-1.84%-4.49%-6.11%-3.03%-4.18%13.85%9.55%
₹ 42813 Yrs-1.20%-2.76%-5.00%-2.24%-3.37%13.16%10.23%
₹ 30,02713 Yrs-1.56%-3.15%-7.35%-6.36%-9.77%12.91%12.46%
₹ 15,56913 Yrs-1.08%-2.52%-5.40%-4.63%-7.66%12.78%10.21%
₹ 14,94913 Yrs-0.58%-1.92%-4.47%-2.99%-10.63%12.43%12.26%
₹ 1,36613 Yrs-1.53%-4.61%-4.24%-5.27%-2.92%11.99%9.99%
₹ 14,09613 Yrs-1.37%-3.50%-5.23%-4.83%-5.87%11.85%9.87%
₹ 4,42712 Yrs-1.74%-5.03%-5.60%-3.26%-3.78%11.66%9.73%
₹ 24,62510 Yrs-1.38%-3.72%-5.92%-2.83%-7.45%11.61%8.95%
₹ 8,16713 Yrs-0.82%-2.98%-5.06%-3.18%-5.66%11.25%8.33%
₹ 2,59813 Yrs-1.61%-4.86%-3.68%1.68%-7.47%11.22%7.87%
₹ 13,55913 Yrs-1.04%-3.92%-6.76%-4.49%-8.25%10.55%6.65%
₹ 6,07113 Yrs-1.39%-4.06%-4.61%-1.89%-5.54%10.45%10.27%
₹ 30,26913 Yrs-0.47%-2.58%-3.66%-0.65%-6.15%10.28%4.63%
₹ 7113 Yrs-1.77%-4.65%-2.86%-0.47%-7.75%10.26%8.97%
₹ 13,49913 Yrs-1.45%-4.61%-6.17%-4.81%-9.63%9.96%7.72%
₹ 5,83913 Yrs-0.97%-3.01%-5.60%-4.59%-10.87%9.78%9.10%
₹ 82113 Yrs-1.44%-4.02%-5.13%-2.03%-7.09%9.65%8.39%
₹ 19617 Yrs-1.23%-0.94%-5.01%-3.83%-10.57%9.65%8.38%
₹ 6,59613 Yrs-1.48%-2.31%-4.13%-1.97%-5.30%9.48%9.31%
₹ 68010 Yrs-0.85%-3.70%-3.94%0.42%-6.47%9.06%8.19%
₹ 97213 Yrs-2.07%-5.62%-5.71%-3.80%-10.56%8.70%7.38%
₹ 488 Yrs-0.62%-2.49%-4.42%-3.71%-10.87%8.70%6.94%
₹ 5,4017 Yrs-1.11%-1.50%-4.11%-3.95%-12.68%8.41%9.71%
₹ 3323 Yrs-2.05%-5.66%-6.93%-3.29%-7.62%8.13%0.00%
₹ 82910 Yrs-1.04%-3.00%-6.04%-4.95%-10.97%7.87%7.66%
₹ 1,21213 Yrs-1.50%-3.74%-5.93%-6.87%-11.23%7.85%7.01%
₹ 3,25313 Yrs-1.17%-2.83%-5.88%-3.66%-9.79%7.76%5.80%
₹ 447 Yrs-0.82%-3.00%-6.08%-3.22%-7.94%6.77%5.45%
₹ 1043 Yrs-1.21%-6.30%-1.43%1.32%-5.35%3.00%0.00%
₹ 88--1.72%-4.02%-4.07%-2.14%-3.70%0.00%0.00%

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Disclaimer: Mutual fund investments carry market risks; read all scheme-related documents carefully. Past performance does not guarantee future returns.

About ELSS Funds

ELSS funds are a type of mutual fund that invests mainly in equity or equity-related instruments. ELSS stands for Equity Linked Savings Scheme, and it offers tax benefits to investors under Section 80C of the Income Tax Act. If you're exploring tax-saving investment options under Section 80C of the Income Tax Act in India, ELSS is one of your best options. These funds offer the dual benefit of potential capital appreciation and tax benefits.
  1. Equity Focus: ELSS funds invest a majority of their portfolio in stocks or equity-related instruments, aiming for higher returns through stock market exposure.
  2. Tax Benefits: Investments in ELSS are eligible for tax deductions of up to ₹1.5 lakh under Section 80C.
  3. Lock-in Period: They come with a mandatory lock-in period of three years, which is shorter compared to other tax-saving instruments like PPF or NSC.
ELSS funds can be a viable option if you're looking for an investment that offers the growth potential of equities along with tax-saving benefits.
ELSS funds have several advantages, especially if you're looking for an investment vehicle that combines tax savings with the potential for higher returns.
  1. Tax Efficiency: One of the primary benefits of ELSS is the tax deduction under Section 80C, which can significantly reduce your taxable income.
  2. Higher Return Potential: They offer higher returns in the long term, as they invest mainly in equities, which have the potential to outperform fixed income instruments.
  3. Shortest Lock-in: Among all Section 80C investments, ELSS has the shortest lock-in period of just 3 years.
  4. SIP Option: You can invest via SIP, making it easy to spread your tax-saving investments throughout the year.
These advantages make ELSS a popular choice for tax-saving investments among equity investors.
Consider these factors before investing in ELSS:
  1. ELSS provides tax benefits under Section 80C up to ₹1.5 lakh, effectively reducing your tax liability.
  2. The 3-year lock-in enforces investment discipline, often leading to better long-term outcomes.
  3. Being equity-oriented, ELSS can be volatile in the short term but has historically delivered superior returns over longer periods.
  4. Each SIP installment has its own 3-year lock-in, so you need to plan liquidity accordingly.
ELSS is a good choice if you have a minimum 3-year horizon and want to combine wealth creation with tax saving.
ELSS Funds are suitable for:
  1. Salaried individuals looking to save tax under Section 80C while also growing their wealth.
  2. Investors with a long-term outlook who can stay invested beyond the 3-year lock-in for better returns.
  3. Young professionals starting their investment journey who want both tax savings and equity exposure.
  4. Those already maxing out other 80C options (PPF, insurance) who want a higher-return tax-saving avenue.
Remember that ELSS invests primarily in equities, so evaluate your risk tolerance before investing.

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FAQs

ELSS Funds (Equity Linked Savings Scheme) work by investing a significant portion of your money into equities and equity-related instruments. They aim to offer dual benefits: the potential for high returns, akin to equity investments, and tax savings under Section 80C of the Income Tax Act. They have a mandatory lock-in period of 3 years.

ELSS Funds are primarily invested in the stock market, across a wide range of sectors and market capitalizations. This includes large-cap, mid-cap, and small-cap stocks. The fund managers have the discretion to choose stocks based on the fund's investment strategy.

ELSS Funds can generate profit through capital appreciation of the stocks they are invested in and dividends received from those stocks. The potential for high returns is similar to other equity investments. However, returns are subject to market risks.

Investments in ELSS Funds are eligible for tax deductions under Section 80C of the Income Tax Act, up to a limit of ₹1.5 lakh annually. The returns, however, are subject to Long Term Capital Gains (LTCG) tax if the gains exceed ₹1 lakh in a financial year, taxed at 10%.

Yes, ELSS Funds come with a mandatory lock-in period of 3 years, the shortest among tax-saving investment options under Section 80C. This lock-in period applies to each SIP installment separately.

No, ELSS Funds have a lock-in period of 3 years from the date of investment. This means you cannot sell or redeem your investment before this period ends. After the lock-in period, you can redeem freely.



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