Tax Saving Mutual Funds

Invest in ELSS - Tax Saving Mutual Funds & Qualify for tax deductions of upto ₹ 1.5 lacs in a year.
Lock in: 3 yearsGrowth With Tax Savings: 17% - 19%

Equity Linked Savings Scheme-The Tax Savings Scheme With Triple Benefits

A significant part of financial planning goes into tax management to save taxes. However, an intelligent investor will not only save taxes but will also maximize returns from those investments. Equity Linked Savings Scheme (ELSS) is one such avenue that gives you the triple benefit of tax saving, good returns and most importantly, liquidity. It is a type of mutual fund that largely invests in equity and equity-related instruments to generate high returns.
It is the only category of mutual fund that is eligible for tax deduction under Sec 80 C of the Income Tax Act. Here is how it fares when compared with other tax savings instruments in the market:
ParticularsReturnTaxabilityLock-in period
Tax Saving FD6-7%Taxable5 years
Public Provident fund7-8%Tax free returns15 years
ELSS10-12%Taxed as LTCG3 years
National Savings Certificate7-8%Taxable5 years
National Pension Scheme7-8%Partially taxableupto the age of 60 yrs
ULIPs8-10%Tax free returns5-7 years

Features of Best ELSS funds

Advantages of investing in the best ELSS mutual funds

Taxability on ELSS

Since ELSS mutual funds invest predominantly in equities, the returns generated therefrom get the same treatment as Capital Gains. The post lock-in returns from these funds are taxed as Long Term Capital Gains if they exceed Rs. 1 lac and attract tax at the rate of 10%.

Things to consider before investing in the best tax saving mutual funds

Investment Goals

Before investing in the best ELSS funds, ensure you know what you want to get out of it. You should have at least a 5-7 years investment horizon if you want to get the most out of your ELSS funds investment. The long-term balances out short-term fluctuations and gives a good return.

How to Start Investing Online in the Best ELSS Funds

Download the INDmoney App
Create your profile
Select any best ELSS fund from our catalogue
Choose between Starting a SIP or One time lumpsum
Complete the payment process


To conclude, there is an underlying risk in all mutual funds. You, as a prudent investor, can only maximize returns and minimize risk through a diversified allocation of assets. There is no greater teacher in helping you cherry-pick your portfolio than your experience. But as they say, ‘Taking no risk is the biggest risk’; so take a calculated risk and do not save your tax planning till the last day. Start investing in the best tax-saving mutual funds now to reap the benefit of time.

Frequently Asked Questions

What are ELSS funds?

How to invest in ELSS funds online?

How are ELSS funds taxed?

Can ELSS funds pay dividends?

How to choose the best ELSS funds to invest in?

What are the risks involved in investing in ELSS funds?

How long should I remain invested in ELSS funds?

Where do ELSS funds invest?

How much money should I invest in ELSS funds?

What are the expected returns of ELSS funds?

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