Best ELSS Mutual Funds | Best Tax Saving Mutual Funds


best elss mutual fund to invest now | best tax saving mutual funds | best tax saving mutual fund |list of elss mutual funds | best elss mutual funds


Investing in Mutual Funds is considered one of the best options to generate wealth. Asset management companies launch various types of mutual funds depending on the needs and risk appetite of their investors. There are various types of mutual funds available to invest in. You can read about the types of mutual funds by clicking here. One of them is ELSS or Tax Saving Mutual Funds.



A lot of investors, especially those who fall under the tax slab have a relationship with mutual funds only through the ELSS mutual funds. In this post, we have discussed the best tax-saving mutual funds. However, before we proceed, we must know what an ELSS Mutual Fund is and what are the benefits of ELSS Mutual Funds.



What is ELSS Mutual Fund


Equity Linked Savings Schemes, popularly known as ELSS are mutual fund investment schemes that help investors to save on income tax. As per section 80c of the Income Tax Act, 1961, any taxpayer can invest up to Rs. 1.5 lakh in securities like PPF, Senior Citizen Savings Scheme and NSC scheme of Post Office, Tax saver Fixed Deposits, National Pension Scheme, and ELSS and claim it an as a deduction from their taxable income. As ELSS schemes save tax, they are also known as tax-saving mutual funds.



Benefits of ELSS Funds

Tax Saving and Wealth Creation

ELSS is the only investment option that not only provides tax deductions under the provisions of Section 80C of the Income Tax Act, 1961 but also helps in wealth growth. As the ELSS funds invest in quality equity stocks, it gives the investors an opportunity to earn excellent returns.



Low Investment High Return

You can start investing in the ELSS funds with just Rs 500. Further, you can generate a great return (can expect a minimum of 10-12% annual growth) on the invested amount.



Regular Income

You can choose dividend pay-outs if you wish to receive regular income from the ELSS Mutual Fund.


Expert Portfolio Manager

Like other mutual funds, ELSS funds are also managed by top professionals in the finance field under the supervision of a Fund Manager. These people have a commendable track record in managing funds along with providing great returns to the investors.



No Exit Load

There is no exit load in ELSS Mutual Funds.


Shortest lock-in period among Section 80C options

ELSS mutual funds have a lock-in period of just three years from the date of unit allotment. This is the shortest lock-in period among all tax-saving investment options under Section 80C of the Income Tax Act, 1961.



A good Habit Builder

As a stock market, or mutual fund investor, on a lot of occasions, we tend to take out our money while the market is falling. However, we should stick to the quality stocks or good mutual funds even when the market is correcting. As ELSS mutual funds have a lock-in period of 3 years, you cannot take out your capital even when the market is going down. This helps to build a good habit so that you can hold good stocks in the bear market and get a great return when the market recovers.



Best ELSS Mutual Funds

There are various factors related to any mutual fund like growth rate, minimum investment, and expense ratio. Hence, below we listed 10 tax-saving ELSS mutual funds

Fund NameGrowth % in last 5 YearsExpense RatioAUM

(in crore)

Min. Lumpsum/


Turn Over (in %)
Quant Tax Plan Growth Option20.64%0.57%1359500/50058.02
Mirae Asset Tax Saver Fund Growth Option15.35%0.57%11,805500/50097.77
Canara Robeco Equity Taxsaver Growth Option14.69%0.66%3602500/500135.12
Bank of India Tax Advantage Fund Growth Plan14.63%1.34%570500/50094.18
IDFC Tax Advantage Fund Growth Option13.27%0.77%3570500/50041.15
DSP Tax Saver Fund Growth Plan12.55%0.84%9504500/50096.97
PGIM India ELSS Tax Saver Fund Growth12.20%1.03%379500/50036.98
Kotak Tax Saver Scheme Growth12.12%0.75%2606500/50094.81
Tata India Tax Saving Fund Growth11.310.77%2905500/5000
Mahindra Manulife ELSS Kar Bachat Yojana Growth9.880.73452500/500130.4



*All the above-mentioned Mutual Funds have a lock-in period of 3 Years.


Best ELSS Mutual Fund to Invest in 2022

From the above list, you can easily pick the best ess mutual fund for yourself. However, let us help you with this task.

In the above list, we can see that the highest return has been given by Quant Tax Plan Growth Option. This fund is invested in bluechip equity stocks like ITC, SBI, ICICI Bank, L&T, Reliance, etc. The fund has allocated 98.8% of its capital in equity and the rest in debt & cash. This fund has diversified its equity investment, in various sectors evenly. The high percentage of exposure to equity has helped this fund to grow at a faster rate. However, too much exposure to equity may be a risk factor. Hence, if you have a high-risk appetite, you can go with Quant Tax Plan Growth Option. If you would have invested Rs. 10,000/month in this scheme for the last five years, the present value of that amount would have been Rs. 13.67 lakh.



The next highest return has been given by Mirae Asset Tax Saver Fund Growth Option. This fund also invested almost in similar companies. However, this fund has focused more on the financial sector (more than 35%). For the last few years, the financial sector hasn’t shown healthy growth, and the stocks of this sector failed to perform as per expectation. This has been reflected in the growth percentage of the Mira Asset Tax Saver Fund. Hence, medium risk-takers can invest in this fund for a steady 12 to 14% annual growth. However, having too much exposure to a particular sector may create concern in the future if the sector shows poor growth. If you would have invested Rs. 10,000/month in this scheme for the last five years, the present value of that amount would have been Rs. 10.07 lakh.



You can choose any of the above-mentioned ELSS mutual funds and start a SIP or deposit a lumpsum amount and let the money grow.


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Best Debt Mutual Funds | Best Liquid Mutual Funds in 2022

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