Top 10 Elss Mutual Funds

Fund NameCategoryRisk1Y ReturnsRatingFund Size(in Cr)
Mirae Asset Tax Saver FundEquityModerately High10.7%5star2,112
Motilal Oswal Long Term Equity FundEquityModerately High-3.3%5star1,389
Escorts Tax PlanEquityModerately High3.9%5star10
Axis Long Term Equity FundEquityModerately High4.8%5star19,817
Aditya Birla Sun Life Tax Relief 96EquityModerately High-1.3%5star8,913
Invesco India Tax PlanEquityModerately High2.3%5star870
Tata India Tax Savings FundEquityModerately High9.0%4star1,873
IDFC Tax Advantage (ELSS) FundEquityModerately High-0.6%4star2,063
Kotak Tax Saver FundEquityModerately High11.6%4star935
Aditya Birla Sun Life Tax PlanEquityModerately High-2.2%4star642
DHFL Pramerica Tax PlanEquityModerately High5.4%4star35
DSP BlackRock Tax Saver FundEquityModerately High7.5%4star5,643
JM Tax Gain FundEquityModerately High5.1%4star33
HDFC Long Term Advantage FundEquityModerately High9.0%4star1,480
HDFC TaxSaver FundEquityModerately High4.2%3star7,545
View All Top 10 Elss Mutual Funds

Best ELSS Mutual Funds

Tax saving mutual funds are ELSS funds ELSS stands for Equity Linked Savings Scheme. The government makes policies to achieve goals they think are necessary for the country’s good as a whole.

ELSS mutual funds come with a 3 year lock-in period. This lock-in period is also a part of the government’s plan to help investors gain in the long term. Most investors often panic when the markets fall. At such times, they end up selling their investments at alower price than at which they had originally bought.

Equity Linked Savings Scheme funds are also known as tax savings mutual funds. They are the most popular in the equity funds category due to the tax benefits provided by them under section 80C of the Income Tax Act. Investor can save up to a amount of 1.5 lakhs by investing in these funds. But these funds have a lock-in period of 3 years. Investors cannot redeem their money before the maturity date. Most of the mutual funds in India generally don’t have a lock-in period but ELSS funds are exception in this aspect.

No other equity mutual funds qualify for the tax exemption under section 80C of the act. However, equity can offer other tax benefits to the investor. For example, investors can get tax free dividends from the equity funds. If you hold your equity mutual funds for more than a year, the returns will qualify for long term capital gains tax. If you sell your equity funds before a year, 15 % tax is levied on the short term capital gains.

Investors can also invest in these funds through Systematic Investment Plan (SIP) to minimize the market risk. These funds are great way to save tax on your hard earned money.

However, over a longer period of time, investments usually perform well. Thus, to protect investors from their own panic moves, the government has mandated a lock-in period of 3 years. Interestingly, this lock-in period of 3 years is the lowest lock-in period among all other tax saving schemes.

Under Sec 80C of the Income Tax Act of India, you can claim deductions from your taxable income by investing in equity oriented funds.

Among these most popular are the ELSS or commonly known as Equity Linked Savings Scheme, where you can save up to 1.5 lakhs in taxes. However, all the investment have minimum three years lock-in period. A 10% tax is applicable on the gains.

Purpose: As explained above, investing in this category can help you with your tax savings and long term capital growth.

Let's have a closer look

Now let us jump and check about these top 10 mutual fund schemes.

Mirae Asset Tax Saver Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 20.91% annualized returns in the last 3 years. In the last 1 year, it gave 10.65% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 10.65% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Neelesh Surana

Launch Date27 Dec 2015
Min Investment Amt500
Groww Rating5star
AUM2,112Cr
1Y Returns10.7%

Motilal Oswal Long Term Equity Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 16.94% annualized returns in the last 3 years. In the last 1 year, it gave -3.27% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -3.27% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Abhiroop Mukherjee, Gautam Sinha Roy, Siddharth Bothra

Launch Date20 Jan 2015
Min Investment Amt500
Groww Rating5star
AUM1,389Cr
1Y Returns-3.3%

Escorts Tax Plan - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 12.1% annualized returns in the last 3 years. In the last 1 year, it gave 3.91% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 3.91% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Sanjeev Sharma, Shamil Mehra

Launch Date06 Jan 2013
Min Investment Amt500
Groww Rating5star
AUM10Cr
1Y Returns3.9%

Axis Long Term Equity Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 15.03% annualized returns in the last 3 years. In the last 1 year, it gave 4.85% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.85% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Jinesh Gopani

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating5star
AUM19,817Cr
1Y Returns4.8%

Aditya Birla Sun Life Tax Relief 96 - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 13.4% annualized returns in the last 3 years. In the last 1 year, it gave -1.26% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -1.26% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Ajay Garg

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating5star
AUM8,913Cr
1Y Returns-1.3%

Invesco India Tax Plan - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 14.89% annualized returns in the last 3 years. In the last 1 year, it gave 2.29% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 2.29% returns in the last 1 year. Groww rated this fund as 5 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Amit Ganatra, Dhimant Kothari

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating5star
AUM870Cr
1Y Returns2.3%

Tata India Tax Savings Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 15.53% annualized returns in the last 3 years. In the last 1 year, it gave 9.02% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 9.02% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Rupesh Patel

Launch Date13 Oct 2014
Min Investment Amt500
Groww Rating4star
AUM1,873Cr
1Y Returns9.0%

IDFC Tax Advantage (ELSS) Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 15.18% annualized returns in the last 3 years. In the last 1 year, it gave -0.61% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -0.61% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Daylynn Pinto

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM2,063Cr
1Y Returns-0.6%

Kotak Tax Saver Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 15.91% annualized returns in the last 3 years. In the last 1 year, it gave 11.62% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 11.62% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Harsha Upadhyaya

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM935Cr
1Y Returns11.6%

Aditya Birla Sun Life Tax Plan - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 12.81% annualized returns in the last 3 years. In the last 1 year, it gave -2.17% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided -2.17% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Ajay Garg

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM642Cr
1Y Returns-2.2%

DHFL Pramerica Tax Plan - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 14.36% annualized returns in the last 3 years. In the last 1 year, it gave 5.36% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.36% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Avinash Agarwal

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM35Cr
1Y Returns5.4%

DSP Tax Saver Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 14.75% annualized returns in the last 3 years. In the last 1 year, it gave 7.45% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 7.45% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Rohit Singhania

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM5,643Cr
1Y Returns7.5%

JM Tax Gain Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 16.56% annualized returns in the last 3 years. In the last 1 year, it gave 5.11% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 5.11% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Sanjay Kumar Chhabaria, Chaitanya Choksi

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM33Cr
1Y Returns5.1%

HDFC Long Term Advantage Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 15.64% annualized returns in the last 3 years. In the last 1 year, it gave 9.01% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 9.01% returns in the last 1 year. Groww rated this fund as 4 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Chirag Setalvad

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating4star
AUM1,480Cr
1Y Returns9.0%

HDFC TaxSaver Fund - Direct - Growth

Fund Performance: This fund has consistently beaten its benchmark in ELSS segment and provided 13% annualized returns in the last 3 years. In the last 1 year, it gave 4.2% returns.

Why to invest: The fund has consistently beaten other funds in same category along with its benchmark and provided 4.2% returns in the last 1 year. Groww rated this fund as 3 Star. This is one of the best Equity mutual fund in India.

Fund Manager: Vinay Kulkarni

Launch Date31 Dec 2012
Min Investment Amt500
Groww Rating3star
AUM7,545Cr
1Y Returns4.2%

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How to Invest in Tax saving Mutual Funds?

In order to apply for Tax saving Mutual Funds, an investor will need to provide his personal details including PAN and Aadhaar number. This is mandatory as per KYC regulations so as to avoid fraud. KYC verification can be done online also. We at Groww can help you become KYC compliant. Once you are KYC complaint, you can use our website, groww.in to invest in any mutual funds – ELSS mutual funds or otherwise. One of the most recommended methods of investments in ELSS is SIP. It allows the investors to average their investments. Moreover, there is no additional taxation on SIP. SIP does not burden the wallet also as it gives the option of investing small amounts rather than investing a lump sum amount.

Why Invest in Tax saving Mutual Funds?

Tax saving Mutual Fund investment is best recommended for those who are in the initial phase of their career. When the earnings are humble, no one likes to take high risks and hence, it is best for beginners. But in much the same way, for people who are earning good but don’t like putting all eggs in one basket, ELSS is good too. This is because ELSS helps them to mitigate their tax by saving money without risk. Thus, there is no specific age where the Tax saving Mutual Fund investment is best. It suits everyone who wants to earn good returns by saving taxes simultaneously.

Who issues Tax saving mutual funds?

Asset management companies (or AMCs or fund houses) create mutual funds. All AMCs will have to be approved by the government body, Securities and Exchange Board of India (SEBI). All mutual funds have to be whetted by SEBI before it is open for the public to invest.

What does investing in Tax saving mutual funds actually mean?

Suppose a mutual fund invests in ten stocks and total current market value of these stocks is 1.1 Crore. Out of this, the AMC deducts say, 0.1 Crore for operating the fund (this is known as the expense ratio). So the net value is 1 crore. Now the AMC will divide this 1 Crore into say, 10,000 parts. These parts are known as units. The cost of one unit is 1Cr/10,000 = Rs. 1000. This is known as the Net Asset Value (NAV) of the mutual fund. Suppose the AMC has set a minimum investment requirement of Rs. 500. Then if you pay Rs. 500, you will get 0.5 units of the fund. Remember that the cost of one unit is the cost when you made the purchase. Suppose after one year, the NAV has fallen to Rs. 700 per unit and you wish to exit the fund (also known as redemption), then you sell your 0.5 units back to the AMC and get 0.5 x Rs. 700 = Rs. 350 back. Yes, you invested Rs. 500 and got back Rs. 350 – a loss of 150 over a year. The point is, that you buy units at current NAV and sell units (fully or partially) at current NAV. This is what investing in mutual fund actually means.

Do Tax saving mutual fund guarantee returns?

Well, sales guys would love to tell you that “over the long term” you will get good returns from mutual funds, but the truth is, there is no guarantee. As the above example shows, you buy at current market value and sell at the current market value. Anything, literally anything can happen in between spectacular returns or spectacular losses. Unless you are mentally ready to accept this and learn how to minimise this risk, do not invest in mutual funds.

How to invest in Tax saving mutual funds on Groww?

One of the best ways to hedge against the small-cap volatility is to adopt a phased approach, also known as Systematic Investment Plan (SIP) approach. We are sure that you must be aware of SIP and its benefits. Buying in small quantity but buying regularly provides you with faster growth. On Groww.in, all transactions to and from AMC is done via BSE. When you decide to invest in a large cap mutual fund of your choice, you choose that mutual fund on the website and click ‘invest’. Following that, you are redirected to the BSE page where you make the payment. BSE then directs your money to the AMC managing your mutual fund. To be assured at your end, you can visit the individual AMC website after the payment. You would be able to see all your purchased units against your folio number.

How long does it take to start investing in Tax saving mutual funds if I do not have a KYC?

It is not possible for any investor to start investing in mutual funds without having completed the KYC process. Under the Prevention of Money Laundering Act (PMLA), Know Your Customer (KYC) norms have been mandated to track the legality of funds used in an investment. KYC is a one-time process which every first-time mutual fund investor needs to follow, to be able to invest in a mutual fund. KYC process on Groww can be completed in 2-3 days. KYC can be completed online with the help of E-KYC or electronic KYC. E-KYC Aadhar (based on OTP) : Investor can use online KYC facility using just the aadhar card number and PAN number, by visiting the website and following the easy process. After entering relevant details like aadhar and PAN number, investor will receive an OTP and KYC will be completed instantly. However, one can invest only up to ₹50,000 per fund house per year under this method.

When is the right time to start investing in Tax saving Mutual Funds?

The answer to this question depends on the following criteria: 1) the rating and performance of mutual fund you are investing into 2) the amount of risk you are willing to take Depending on the above factors let's go ahead: 1) the performance of mutual fund you are investing into makes a lot of difference since a lot of research needs to be done before investing. i) how that particular fund is diversifying its assets since many of funds are sector funds and some others put a lot of money into one sector like banking/finance. ii) But if that particular sector doesn't perform well in the long term you would end up losing your money iii) Some sectors like FMCG (HUL, Dabur) or automobile like Maruti Suzuki(because of innovations it brings in) almost make profits throughout the year and hence it's very advantageous to invest in them for long-term in these sectors. Investment time: more than 3 years. 2) The amount of risk you are willing to take i) It is important since if you want to invest in low-risk funds, debt funds will be the best option(moderate returns, low risk) investment time period: less than 1 or 1.5 years ii) But if you want high returns, more diversification equity mutual funds will be the best since higher the risk, more will be the returns.Investment time: depending on the performance of fund (on an average 4 or greater than 4 years) iii) For a balanced portfolio, you may invest into balanced mutual funds where there is a combination of both equity and debt mutual funds which will again help you to invest for a good duration like less than 2-3 years.

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Mutual fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing.
Past performance is not indicative of future returns. Please consider your specific investment requirements, risk tolerance, investment goal, time frame, risk and reward balance and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.
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