Last Updated on Aug 9, 2023 by Harshit Singh

At the end of every financial year, most investors rush to find ways to save tax. One of the ways you can save Rs. 1,50,000 in tax is through ELSS mutual funds. These tax-saving mutual funds offer dual benefits of wealth creation through equity exposure and tax saving under Section 80C. To know more about ELSS funds and how to invest in ELSS funds, read on.

What are ELSS funds?

ELSS (Equity-Linked Savings Scheme) funds, popular as tax-saving mutual funds, are professionally run funds that focus primarily on equity and equity-linked securities to generate returns for the investors. A 60-80% of its portfolio is invested in diversified equity and related securities, and the remaining may have exposure to fixed-income securities.

ELSS funds are the only funds with tax deduction benefits that help investors to save on taxes under the Section 80C of the Income Tax Act, 1961. Among all Sec 80C investments used for tax savings, ELSS funds are the only investment with the least lock-in period of three years. 

Investors can gain from ELSS funds by investing a lump sum amount or invest via a Systematic Investment Plan (SIP) that offers the additional benefit of cost averaging.

Types of ELSS funds

ELSS funds are classified into three categories:

  • Dividend payout funds or Income Distribution cum Capital Withdrawal (IDCW) plans where investors receive tax-free dividends. These funds invest primarily in companies having the potential to give dividend payout consistently.
  • Dividend reinvestment funds or reinvestment of IDCW plans where returns or dividends are declared but instead of paying to investors, the dividends get reinvested as a new investment. 
  • Growth Funds where the investor can realise the full value of the fund at the time of redemption.

How to invest in ELSS funds?

To invest in ELSS mutual funds,

Step #1 – Open ‘Tickertape Mutual Fund Screener

Step #2 – Go to ‘Category’ and select ‘Equity’

Step #3 – Under ‘Equity’ select ‘Equity Linked Saving Schemes’

List of ELSS schemes in India

NameAUMCAGR 3YExpense Ratio
Sundaram LT Micro Cap Tax Adv Fund-Sr VI35.4145.921.16
Sundaram LT Micro Cap Tax Adv Fund-Sr IV36.0545.241.32
Sundaram LT Micro Cap Tax Adv Fund-Sr V30.1944.601.19
Sundaram LT Tax Adv Fund-Sr III31.9344.501.18
Sundaram LT Micro Cap Tax Adv Fund-Sr III72.4944.491.24
Sundaram LT Tax Adv Fund-Sr IV21.1244.421.18
Quant Tax Plan4,049.3937.820.57
SBI LT Advantage Fund-IV182.2336.400.00
Bandhan Tax Advt(ELSS) Fund4,776.4932.980.73
SBI Tax Advantage Fund-III32.3732.740.00
SBI LT Advantage Fund-III60.5431.990.00
SBI LT Advantage Fund-I39.9331.532.65
SBI LT Advantage Fund-II34.1430.552.65
SBI LT Advantage Fund-VI235.7330.140.00
Franklin India Taxshield5,028.5128.690.85
Nippon India Tax Saver (ELSS) Fund12,634.3827.901.05
Mahindra Manulife ELSS Fund649.2127.640.68
HDFC TaxSaver10,930.2727.561.16
SBI Long Term Equity Fund14,429.8427.081.00
ICICI Pru LT Wealth Enhancement Fund34.5426.950.97
Bank of India Tax Advantage Fund791.8326.811.26
PGIM India ELSS Tax Saver Fund557.1426.680.89
JM Tax Gain Fund87.3026.661.42
DSP Tax Saver Fund11,302.9626.560.77
Kotak Tax Saver Fund3,855.2626.490.59
Mirae Asset Tax Saver Fund16,633.9826.430.56
Bank of India Midcap Tax Fund-Sr 155.5325.860.00
Parag Parikh Tax Saver Fund1,849.0125.650.78
Motilal Oswal Long Term Equity Fund2,499.9625.570.72
Bank of India Midcap Tax Fund-Sr 229.0425.280.00
Tata India Tax Savings Fund3,557.1024.990.76
Union Tax Saver (ELSS) Fund663.3724.891.51
Sundaram Tax Savings Fund1,051.2224.861.77
ICICI Pru LT Equity Fund (Tax Saving)10,962.5324.561.16
Canara Rob Equity Tax Saver Fund5,749.9224.260.56
Sundaram Diversified Equity1,682.5124.111.57
Quantum Tax Saving Fund137.9024.081.29
Sundaram LT Tax Adv Fund-Sr I18.0623.761.37
Sundaram LT Tax Adv Fund-Sr II11.4923.261.17
Edelweiss Long Term Equity Fund (Tax Savings)258.1523.150.69
HSBC Tax Saver Equity Fund190.6923.081.30
SBI LT Advantage Fund-V296.8122.730.00
UTI LT Equity Fund (Tax Saving)3,125.8322.580.96
Navi ELSS Tax Saver Fund60.0522.070.40
LIC MF ELSS952.3222.021.47
HSBC ELSS Fund3,300.3921.451.11
Invesco India Tax Plan2,102.5221.100.90
ITI Long Term Equity Fund188.4520.480.50
Taurus Tax Shield Fund64.1920.141.78
Groww ELSS Tax Saver Fund38.1219.390.85
Baroda BNP Paribas ELSS Fund728.0819.281.14
Axis Long Term Equity Fund32,325.0616.950.76
Shriram Long Term Equity Fund39.9016.920.80
Aditya Birla SL ELSS Tax Relief 9613,991.7513.680.92
WOC Tax Saver Fund72.650.000.64
Samco ELSS Tax Saver Fund53.420.000.89
360 ONE ELSS Nifty 50 Tax Saver Index Fund42.150.000.27
Navi ELSS Tax Saver Nifty 50 Index Fund12.060.000.11
NJ ELSS Tax Saver Scheme103.480.000.61

Among the list of 59 listed ELSS schemes, pick the one that suits your financial needs and invest through your broking account.

Advantages of investing in ELSS fund

ELSS funds are one of the most preferred investments among all Section 80C investments because of the following advantages: 

  • Tax benefit – ELSS funds are the only tax-saving funds with the potential of providing inflation-beating returns as it invests in equity and equity-related securities.
  • Wealth creation – It offers dual advantages of tax deductions and exemption besides wealth creation.
  • Long-term investment: It is suitable for an investor with a long-term investment horizon as well as short-term as it is a fund with a lock-in period of just three years.
  • No entry or exit load – The investment does not involve entry and exit loads. 
  • Minimum investment required – Investors need not accumulate funds to start investing in an ELSS fund. Start investing with a small amount, as low as Rs. 500 in some funds. The minimum amount for investing varies from fund to fund.
  • Dedicated fund managers – Superior fund management is a part of the ELSS world where fund managers perform thorough research for long-term strategic decisions in addition to analyzing market-wide trends to provide higher actual returns than expected by investors.


ELSS funds are a popular tax-saving tool aimed at maximising capital appreciation over the long term through investment in equity and equity-related securities. ELSS funds offer the dual benefit of tax saving up to Rs. 1.5 lakh under Section 80C of the Income Tax Act, as well as provide exposure to the equity market to generate potentially higher returns than other tax saving instruments. ELSS funds have the shortest lock-in period of 3 years.

Ayushi Mishra
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