For Quick Alerts
For Daily Alerts

A Look At The Best Tax Saving ELSS Mutual Funds In India


Tax Saving Mutual Funds primarily the Equity Linked Savings Scheme (ELSS) offer tax savings and also the ability to beat returns from traditional tax saving schemes.

The sharp rally in the stock markets in the last 2 years has led to heavy inflows into India's domestic markets, including some of the best tax saving mutual funds in India.

Read how and why to invest in ELSS here


Salient features of the ELSS scheme:

1) They place money in equities and are diversified equity mutual funds.

2) Since they park money in equities, the returns could be volatile. You can get superior returns over the longer term.

A Look At The Best Tax Saving ELSS Mutual Funds In India
3) There is a lock-in period of three years and you cannot withdraw the money.

4) Investment in ELSS qualifies for tax rebate under Sec 80C of the Income Tax Act.

5) Returns are tax free.

Tax saving mutual funds over the last three years have given superior returns. This does not mean that they would always continue to beat the traditional tax savings schemes like tax saving bank deposits or Public Provident Fund (PPF). Their returns are always subject to market risk and should be invested after careful research.

Some of the best tax saving mutual funds today, could be bad performers tomorrow. Therefore, we are highlighting a list of tax saving ELSS mutual funds that have a sizeable corpus and have a proven track record.

Returns from tax saving ELSS mutual funds in last few years:

1 Year Return 3 Year Return 5 Year Return
Axis Long Term Equity Fund 17.00% 30.00% 19.43%
Birla Sun Life Tax Plan 17.00% 24.21% 13.31%
DSP Blackrock Tax Saver Fund 7.21% 11.23% 21.21%
ICICI Prudential Long Term Equity Fund 3.02% 21.21% 12.45%
IDFC Tax Advantage ELSS Fund 11.01% 24.88% 12.36%
Franklin India Tax Shield 14.01% 23.67% 21.45%
Reliance Tax Saver Fund 0.87% 24.43% 13.51%
Tata Long Term Equity Fund 13.05% 22.67% 12.21%
BNP Paribas Long Term Equity Fund 0.21% 13.27% 24.31%

From the above table it is rather clear that some of the best tax saving mutual funds in India have offered superb returns over the last 3-5 years.


For example, Axis Long Term Equity Fund has given a return of almost 30 per cent in the last three years. If you closely study the portfolio of Axis Equity, you would realize that the portfolio comprises of blue chip stocks like HDFC Bank and Infosys. These stocks have a heavy weightage in the company's portfolio.

Should the market recover, expect these stocks to do well, thus propelling the returns and the net asset value of Axis Long Term Equity Fund even higher.

Birla Sun Life Tax Plan has also given good returns in the last 3-5 years and so have most other funds. This makes a strong case for investment in some of the best tax saving ELSS mutual funds in the country.


If you add the tax savings benefits that you get from these ELSS mutual funds, you would realize that your returns are far superior, once you consider the savings from tax benefits. For example, if these give you a return of 20 per cent per annum and you are in the 10 per cent tax bracket, returns would be 30 per cent.

This makes these Tax Saving Mutual Funds a good investment proposition. Do not wait for end of the financial year to invest, go ahead and invest now as NAVs have dipped in the last 2 months.

Read more about: mutual funds elss birla sun life
Company Search
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more