Best Tax Saving Mutual Funds Or ELSS Funds In India That Gave Up To 20% Returns In 3 Years | Check Full List

Best Tax Saving or ELSS Funds in India: Several mutual funds in India, falling in the category Equity Linked Savings Scheme, are offering tax benefits under Section 80C of the Income Tax Act. For those investors who have still opted for the old tax regime and are looking for tax-saving mutual fund investment options in the coming years, here is a complete list of the top 5 best-performing mutual funds in the category.

What is an ELSS Mutual Fund?

ELSS is a mutual fund category that allows 80% investment in stocks in accordance with the Equity Linked Saving Scheme, as per the Association of Mutual Funds in India (AMFI).

ELSS funds come with a three-year lock-in period, which si the shortest amongst all other tax-saving options. The scheme investment is also eligible for deduction under section 80C of the Income Tax Act up to Rs 1,50,000.

Risk-averse investors must consider all the pros and cons before investing in ELSS mutual fund schemes. Unlike other instruments like Public Provident Fund (PPF), National Savings Certificate (NSC), ELSSs do not come with guaranteed returns.

Returns on the investment instrument may be subject to market volatility and fluctuations. At the same time, ELSS funds may also give higher returns compared to fixed instruments because of their association to equities and the stock market.

Best ELSS Schemes With Higher Returns In 3 Years

Scheme Name	Latest NAV (Regular)	Latest NAV (Direct)	3-Year Return % (Regular)	3-Year Return % (Direct)
Motilal Oswal ELSS Tax Saver Fund	₹52.0557	₹59.8880	23.40%	24.88%
SBI ELSS Tax Saver Fund	₹451.8388	₹498.1760	23.16%	23.99%
HDFC ELSS Tax Saver	₹1468.5800	₹1587.2680	20.55%	21.30%
WhiteOak Capital ELSS Tax Saver Fund	₹18.0980	₹19.0910	20.28%	22.32%
JM ELSS Tax Saver Fund	₹50.8839	₹58.3850	20.10%	21.49%

Downside risk is another crucial factor, focusing on negative returns. The calculation involves summing squares of returns below zero, divided by the number of days considered. A lower downside risk suggests a more stable fund, appealing to cautious investors.

Asset size is also a consideration, with a minimum threshold of Rs 50 crore for equity funds. Larger asset sizes can indicate stability and liquidity, essential for investors seeking reliable performance.

Investors typically make tax-saving investments in the financial year's final quarter, from January to March. They aim to utilise the Rs 1.5 lakh deduction under Section 80C. For those planning tax-saving strategies this year, ELSS offers a viable option.

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