Top 10 tax saving mutual funds in India ELSS Funds

Last Updated on 8 June 2026

Saving taxes and building wealth at the same time sounds like a perfect financial strategy. Yet, many investors struggle to find the right investment option that balances tax benefits with long-term growth. This is where ELSS (Equity Linked Savings Scheme) mutual funds stand out. If you’re looking for the top 10 tax saving mutual funds in India, you’re not alone. Every year, thousands of salaried employees, professionals, and business owners search for the best ELSS funds to claim deductions under Section 80C while generating market-linked returns.

Unlike traditional tax-saving instruments such as PPF, NSC, or Tax Saver Fixed Deposits, ELSS funds invest primarily in equities, giving investors the potential to create substantial wealth over time. They also come with the shortest lock-in period among all major Section 80C investments—just three years.

In this guide, we’ll compare the best tax-saving mutual funds in India for 2026, understand how ELSS works, and help you choose the right fund based on your financial goals.

Table of Contents

What Are Tax Saving Mutual Funds?

Tax Saving Mutual Funds, commonly known as ELSS Funds, are diversified equity mutual funds that qualify for tax deductions under Section 80C of the Income Tax Act.

Key Features of ELSS Funds

Tax deduction up to ₹1.5 lakh under Section 80C
Mandatory lock-in period of 3 years
Primarily invest in equities
Potential for higher long-term returns
SIP and lump sum investment options available
Managed by professional fund managers

Because these funds invest in stocks, they carry market risk but have historically outperformed many traditional tax-saving options over long periods.

For detailed information about Best Hybrid Mutual Funds

Why ELSS Funds Are Popular in 2026

The investment landscape has evolved significantly. Investors are increasingly prioritizing wealth creation rather than merely saving taxes.

Here are some reasons ELSS funds remain popular:

1. Shortest Lock-in Period

Compared to:

Investment Option	Lock-in Period
ELSS Funds	3 Years
PPF	15 Years
NSC	5 Years
Tax Saver FD	5 Years

2. Higher Return Potential

ELSS funds invest in equity markets, which historically have delivered superior long-term returns compared to fixed-income instruments.

3. SIP Flexibility

You can start investing with as little as ₹500 per month.

To calculate SIP Investment, use our SIP Calculator

4. Professional Management

Fund managers actively monitor portfolios and adjust holdings according to market conditions.

For detailed information about Best Multi Asset Allocation Fund for Long Term Investment

Top 10 Tax Saving Mutual Funds in India 2026

Comparison Table

Fund Name	Category	Expense Ratio	Suitable For
Quant ELSS Tax Saver Fund	ELSS	Low	Aggressive Investors
Motilal Oswal ELSS Tax Saver Fund	ELSS	Low	Long-Term Growth
SBI Long Term Equity Fund	ELSS	Moderate	Beginners
DSP ELSS Tax Saver Fund	ELSS	Low	SIP Investors
HDFC ELSS Tax Saver Fund	ELSS	Moderate	Conservative Equity Investors
Nippon India ELSS Tax Saver Fund	ELSS	Moderate	Long-Term Wealth Creation
Parag Parikh ELSS Tax Saver Fund	ELSS	Low	Quality-Focused Investors
Franklin India ELSS Tax Saver Fund	ELSS	Moderate	Experienced Investors
HSBC ELSS Tax Saver Fund	ELSS	Moderate	Diversification
JM ELSS Tax Saver Fund	ELSS	Moderate	High-Risk Investors

1. Quant ELSS Tax Saver Fund

Quant ELSS has gained immense popularity due to its aggressive investment strategy and strong historical performance.

Pros

Strong long-term track record
Dynamic portfolio management
Competitive expense ratio

Cons

Can be volatile during market corrections

Best suited for investors with a high-risk appetite and long investment horizon.

2. Motilal Oswal ELSS Tax Saver Fund

Motilal Oswal has emerged as one of the fastest-growing asset management companies in India.

Why Investors Like It

Focus on high-conviction stocks
Strong wealth creation potential
Consistent long-term returns

This fund can be an excellent choice for investors looking to maximize growth over a 10+ year horizon.

3. SBI Long Term Equity Fund

One of India’s most trusted ELSS funds.

Key Highlights

Large asset base
Proven track record
Suitable for first-time investors

Many financial planners recommend SBI Long Term Equity Fund for investors seeking stability along with tax benefits.

4. DSP ELSS Tax Saver Fund

DSP ELSS offers a balanced approach to investing.

Advantages

Diversified portfolio
Reasonable risk profile
Good long-term consistency

Suitable for SIP investors seeking steady wealth accumulation.

5. HDFC ELSS Tax Saver Fund

HDFC has been a well-known name in the mutual fund industry for decades.

Why Consider It?

Strong research-driven investment process
Experienced fund management
Long operating history

Ideal for investors who prefer established fund houses.

6. Nippon India ELSS Tax Saver Fund

Nippon India continues to attract investors due to its growth-oriented strategy.

Benefits

Broad diversification
Strong equity exposure
Good long-term return potential

Suitable for investors aiming to create wealth alongside tax savings.

7. Parag Parikh ELSS Tax Saver Fund

Parag Parikh is known for its value-investing philosophy.

Unique Features

Focus on quality businesses
Long-term wealth creation
Disciplined investment approach

Best for investors who appreciate a quality-over-quantity strategy.

8. Franklin India ELSS Tax Saver Fund

Franklin Templeton has decades of experience managing investments.

Strengths

Well-diversified portfolio
Proven investment framework
Consistent performance

A suitable option for investors seeking established fund management expertise.

9. HSBC ELSS Tax Saver Fund

HSBC’s ELSS fund has quietly built a respectable performance record.

Highlights

Balanced investment strategy
Diversified stock selection
Reasonable risk profile

Good choice for investors seeking diversification.

10. JM ELSS Tax Saver Fund

Though smaller compared to peers, JM ELSS can offer unique opportunities.

Why It Stands Out

Focused portfolio
Potential for outperformance
Suitable for experienced investors

Not ideal for conservative investors due to relatively higher risk.

For detailed information about 9 High Return Investment Options with Calculated Risk

How to Choose the Best Tax Saving Mutual Fund

Many investors make the mistake of selecting funds solely based on recent returns.

Instead, evaluate:

Fund Performance Consistency

Look at 3-year, 5-year, and 10-year performance.

Expense Ratio

Lower costs can significantly improve long-term returns.

Fund Manager Experience

Experienced managers often navigate market volatility better.

Investment Philosophy

Choose a fund whose strategy aligns with your risk tolerance.

Portfolio Quality

Review the fund’s top holdings and sector allocation.

ELSS vs Other Tax Saving Investments

Feature	ELSS	PPF	Tax Saver FD
Tax Benefit	Yes	Yes	Yes
Lock-in	3 Years	15 Years	5 Years
Return Potential	High	Moderate	Low
Market Linked	Yes	No	No
Wealth Creation Potential	High	Moderate	Low

For long-term investors, ELSS often offers the best balance between tax efficiency and growth potential.

Common Mistakes Investors Should Avoid

Investing Only for Tax Saving

Tax benefits should be a bonus, not the primary reason for investing.

Chasing Last Year’s Top Performer

Past performance does not guarantee future returns.

Ignoring Risk Levels

Aggressive funds may not suit every investor.

Stopping SIPs During Market Corrections

Market downturns often provide attractive buying opportunities.

Frequently Asked Questions

Which is the best tax saving mutual fund in India in 2026?

Quant ELSS, Motilal Oswal ELSS, SBI Long Term Equity Fund, and DSP ELSS are among the most popular choices.

Are ELSS funds safe?

ELSS funds invest in equities, so they carry market risk. However, they can generate significant long-term wealth when held for extended periods.

What is the lock-in period of ELSS funds?

ELSS funds have a mandatory lock-in period of 3 years.

Can I invest through SIP in ELSS funds?

Yes. Most ELSS funds allow SIP investments starting from ₹500.

Can ELSS funds beat inflation?

Historically, equity-oriented investments have outpaced inflation over long periods.

Final Thoughts

The top 10 tax saving mutual funds in India offer much more than tax deductions. They provide an opportunity to build long-term wealth while reducing taxable income under Section 80C.

For investors with a long investment horizon, ELSS funds can be one of the most rewarding components of a financial plan. Rather than chasing short-term performance, focus on consistency, fund quality, and alignment with your goals.

Whether you’re a salaried employee planning taxes or a long-term investor seeking growth, ELSS funds deserve serious consideration in 2026.

Disclaimer: The content provided is for educational and informational purposes only and should not be considered financial, investment, insurance, or legal advice.