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Best ELSS Funds in India to Invest in 2021

Best ELSS Funds - Consider the best performing elss mutual funds to invest in 2021 with Scripbox.com. Find the list of best elss funds in India on the basis of Returns, Latest Nav, Ratings, Performance etc.

Learn how Scripbox Recommends funds
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Recommended

2 funds

Scripbox algorithm recommends 2-4 funds for investment for an investment asset class such as large cap, diversified, liquid etc. When you invest for an objective, the algorithm suggests the appropriate asset class and funds.

Best Tax Saving Mutual Funds

Mirae Asset Tax Saver Fund (G)

Mirae Asset Tax Saver Fund (G)

Tax Saving

Recommended

Top Ranked

₹ 6,350 Cr

Fund Size

15.50%

3Y returns

Canara Robeco Equity Taxsaver fund (G)

Canara Robeco Equity Taxsaver fund (G)

Tax Saving

Recommended

Top Ranked

₹ 1,724 Cr

Fund Size

15.40%

3Y returns

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Mirae Asset Tax Saver Fund (DP-A)

Mirae Asset Tax Saver Fund (DP-A)

Tax Saving

Top Ranked

₹ 6,350 Cr

Fund Size

14.80%

3Y returns

Canara Robeco Equity Taxsaver fund (DR-6M)

Canara Robeco Equity Taxsaver fund (DR-6M)

Tax Saving

Top Ranked

₹ 1,724 Cr

Fund Size

12.90%

3Y returns

Canara Robeco Equity Taxsaver fund (DP-6M)

Canara Robeco Equity Taxsaver fund (DP-6M)

Tax Saving

Top Ranked

₹ 1,724 Cr

Fund Size

12.90%

3Y returns

DSP Tax Saver Fund (G)

DSP Tax Saver Fund (G)

Tax Saving

Top Ranked

₹ 7,882 Cr

Fund Size

11.90%

3Y returns

Axis Long Term Equity Fund (G)

Axis Long Term Equity Fund (G)

Tax Saving

Top Ranked

₹ 27,216 Cr

Fund Size

12.20%

3Y returns

Nippon India Tax Saver ELSS Fund (G)

Nippon India Tax Saver ELSS Fund (G)

Tax Saving

Top Ranked

₹ 11,221 Cr

Fund Size

0.80%

3Y returns

BOI AXA Tax Advantage Eco fund (G)

BOI AXA Tax Advantage Eco fund (G)

Tax Saving

Top Ranked

₹ 398 Cr

Fund Size

11.60%

3Y returns

Aditya Birla Sun Life Tax Relief 96 Fund ELSS U S 80C of IT ACT LSP (G)

Aditya Birla Sun Life Tax Relief 96 Fund ELSS U S 80C of IT ACT LSP (G)

Tax Saving

Top Ranked

₹ 13,427 Cr

Fund Size

6.20%

3Y returns

Aditya Birla Sun Life Tax Plan (G)

Aditya Birla Sun Life Tax Plan (G)

Tax Saving

Top Ranked

₹ 528 Cr

Fund Size

5.40%

3Y returns

BOI AXA Tax Advantage fund (G)

BOI AXA Tax Advantage fund (G)

Tax Saving

Top Ranked

₹ 398 Cr

Fund Size

10.80%

3Y returns

Tata India Tax Savings Fund (G)

Tata India Tax Savings Fund (G)

Tax Saving

Top Ranked

₹ 2,636 Cr

Fund Size

8.90%

3Y returns

UTI Long Term Equity Fund (G)

UTI Long Term Equity Fund (G)

Tax Saving

Top Ranked

₹ 1,746 Cr

Fund Size

10.40%

3Y returns

ICICI Prudential Long Term Equity Fund Tax Saving (G)

ICICI Prudential Long Term Equity Fund Tax Saving (G)

Tax Saving

Top Ranked

₹ 8,251 Cr

Fund Size

10.20%

3Y returns

SBI Magnum Long Term Equity Scheme (G)

SBI Magnum Long Term Equity Scheme (G)

Tax Saving

Top Ranked

₹ 9,184 Cr

Fund Size

8.20%

3Y returns

JM Tax Gain Fund (G)

JM Tax Gain Fund (G)

Tax Saving

Top Ranked

₹ 51 Cr

Fund Size

11.50%

3Y returns

BNP Paribas Long Term Equity Fund (G)

BNP Paribas Long Term Equity Fund (G)

Tax Saving

Top Ranked

₹ 496 Cr

Fund Size

10.20%

3Y returns

Motilal Oswal Long Term Equity Fund (G)

Motilal Oswal Long Term Equity Fund (G)

Tax Saving

Top Ranked

₹ 2,023 Cr

Fund Size

6.10%

3Y returns

Franklin India Taxshield Fund (G)

Franklin India Taxshield Fund (G)

Tax Saving

Top Ranked

₹ 4,407 Cr

Fund Size

7.70%

3Y returns

How does Scripbox rate funds?

Proprietary system to rate mutual funds

We use a proprietary system to rate mutual funds and based on that make a recommendation or rate the fund as top ranked.

What Scripbox recommendations mean?
Scripbox algorithm recommends 2-4 funds for investment for an investment asset class such as large cap, diversified, liquid etc. When you invest for an objective, the algorithm suggests the appropriate asset class and funds.
Track Record

Track Record

We look at consistent and long historical performance for our analysis.

Relative Size

Relative Size

We look at the size of the fund with respect to other funds in the category. Larger funds are preferred.

Category View

Category View

We check if the sub-category of the fund is recommended by us.

Consistency Of Performance

Consistency Of Performance

Consistency of performance over various tenures is analysed for a relative performance stack.

Track Record

Track Record

We look at consistent and long historical performance for our analysis.

Relative Size

Relative Size

We look at the size of the fund with respect to other funds in the category. Larger funds are preferred.

Impact of Interest Rates

Impact of Interest Rates

We check the relative interest rate risk of the sub-category of the fund. Lower the better.

Credit Quality Of Fund’s Portfolio

Credit Quality Of Fund’s Portfolio

We check the relative interest rate risk of the sub-category of the fund. Lower the better.

Equity Funds

Debt Funds

How to invest in best mutual funds?

Investing through Scripbox is made easy and paperless. All you need to do is follow the below steps and start investing.

choose long term plan

Choose a plan

Choose a plan to invest to start investing

create account

Create an Account

Create an account with Scripbox through a paperless process, to invest in this fund

invest online

Invest online & transfer

Invest via netbanking, UPI or through an SIP (eNACH mandate).

track investments

Track your investments

Track, invest more and withdraw your investments through the Scripbox dashboard

What are Best ELSS Funds?

What are ELSS Funds?

Equity Linked Savings Scheme (ELSS) is a kind of mutual fund scheme that invests in equity and equity-related instruments. ELSS comes with a lock-in of 3 years and provides a tax benefit up to 1.5 lakhs in a year under section 80C of the Income Tax Act.

Investments in ELSS can be made through lump-sum payments or SIP. If payments are made through SIP, the lock-in period of 3 years is taken for each SIP.

What is a mutual fund NAV?

Net asset value NAV is the market price of the fund. It is important because it represents the worth of each share of the fund. One can say just like shares have a share price, mutual funds have a NAV to represent it’s worth.

Features of ELSS Mutual Funds

Lock-in period

Equity linked savings schemes have the lowest lock-in period when it comes to tax-saving investments. It has a lock-in period of 3 years post which the investments can be updated. ELSS funds offer the possibility of a higher return as compared to traditional tax-saving fixed deposits, public provident fund, national pension scheme, and others

Save Tax

Investments in ELSS funds provide a tax benefit of 1.5 lakh as per section 80C of the Act. It helps you to save tax and get better returns. It helps you in planning your taxable income by claiming tax deductions

Mode of investment

Investments in ELSS can be made either through the lumpsum method or SIP. If invested through SIP mode, it offers the benefit of rupee cost averaging and saves the trouble of investing a lumpsum amount at one go.

Thus investment through SIP mode also does not feels heavy on the pocket.

Management of the invested amount

ELSS are managed by professionals who are well-versed with the market conditions and are aware of the ups and downs in the market. The money invested by anyone through ELSS is managed by these fund managers.

How to invest in Top Performing Mutual Fund?

Time needed: 30 minutes.

An investor can invest a lump sum one time or through SIP periodically. An investor can choose to invest lump sum one time if he has considerable corpus to invest for a longer-term. While SIP is a regular investment over a period of time.  An investor can choose to invest monthly, quarterly, or half-yearly. SIP mutual funds are recommended for the first time mutual fund investors. Investing through Scripbox is made easy and paperless. All you need to do is follow the below steps and start investing.

  1. Choose a plan

    Choose a plan to invest to start investing

  2. Create your account

    Set-up your investment account

  3. Invest online & transfer

    Make instant payment or setup your investment for a later date

  4. Money will transfer to mutual fund companies

    Money gets deducted from bank and gets transferred directly to mutual fund companies

  5. Track your investments

    Mutual fund companies allot you units and send confirmation via email & SMS. The same gets updated in your Scripbox Account.

Who should invest in ELSS funds?

Any individual or HUF can make investments in ELSS through SIP or lumpsum method. ELSS is considered better if you have a long term investment horizon, preferably more than 3 years.

ELSS comprises mostly equity instruments that can offer exceptional returns but also demands a good understanding of equity asset class risk from the investor.

Furthermore, by investing in ELSS funds, one can claim to benefit up to 1.5 lakhs under section 80 C of the income tax act.

What are the Options for Investing in the Best ELSS Funds?

Growth Option

Under the growth option, the profits made by the fund is not paid off as dividend. Instead, they are reinvested in the scheme. The profits are distributed to the investors at the time of redemption. This is also dependent on the NAV of the fund as if the profits go up so will the NAV and vice-versa

Dividend Option

As the name suggests, the profits made in the schemes are not re-invested but distributed as dividends to the investors on a half-yearly, quarterly, or annual basis. The dividend declaration and payment is not fixed. It happens only when the scheme generates profits.

How to evaluate the best ELSS mutual funds?

Evaluating top mutual funds to invest can be a tricky task. One can check the below parameters in order to evaluate the funds:

Fund house history

Ideally, fund houses that have performed consistently over a long term horizon, say above 5 years, should be considered for the purpose of investment. If the fund outperforms its benchmark, it is considered that the fund has delivered higher returns. Keep in mind, the performance of the fund depends on the quality and performance of the stock it has in its portfolio before concluding on top mutual funds.

Returns

Comparing just the respective fund’s return with the benchmark is not enough. One also needs to compare the performance of the funds with its competitors. The investments should be made after carefully evaluating the returns over a longer period of time.

Expense Ratio

Equity linked savings schemes are managed by professionals who invest their own time and resources to provide a better return on your investment. Their knowledge of the markets and deep understanding of the field helps them in evaluating which stocks should form part of the fund.

The expense ratio shows how much money goes towards managing the fund. If the fund has a lower expense ratio that means your take-home returns will be higher and vice versa.

Portfolio Turnover

Portfolio turnover simply means how quickly stocks in the funds are bought & sold by the fund manager.

As the funds are eventually handled by the fund manager, he gets to decide when to enter or exit the market. A low portfolio turnover indicates that he is neither entering nor quitting the markets.

On the other hand, a high turnover indicates that too frequent movements have been made in the portfolio.

ELSS vs other tax-saving investment schemes

When it comes to financial planning, managing tax-saving investment schemes, and picking the best-suited investment scheme is crucial. It depends on the investor, his investment objectives, knowledge of the investment plans and other factors

To help you decide on ELSS vs other tax saving schemes, we have listed a comparison below:

Investment PlansReturnsLock-in PeriodTax Implications
ELSS Funds15% to 18%3 yearsInvestment- Tax Deduction
Income- Partially Taxable
Tax Saving Fixed Deposits6% to 7% differs from bank to bank5 yearsInvestment- Tax Deduction
Income- Taxable, if interest > Rs 10,000
Added to taxable income
Public Provident Fund (PPF)7% to 8%15 yearsInvestment- Tax Deduction
Income- Non-Taxable
National Pension System (NPS)8% to 10%Till RetirementInvestment- Tax Deduction
Income- Partially Taxable
National Savings Certificate7% to 8%5 yearsInvestment- Tax Deduction
Income- Taxable

Frequently Asked Questions

What is the lock-in period in the case of ELSS?

Lock-in period is the time period for which investments are required to be made to avail of the tax benefits. In the case of ELSS, it is 3 years.

How is ELSS SIP different from normal SIP?

When we make a SIP, a fixed amount is deducted monthly towards the investment. In an ELSS, each SIP made is locked in for a period of 3 years if the investor wants to avail of the tax benefits.
It is very convenient and easy nowadays to invest through SIP, you only need to link your saving account to the fund manager. Then provide an instruction to deduct investment amount every month from your saving account.
You can use Scripbox’s SIP calculator to estimate the wealth gained and maturity of the investments made through SIP to help you in investment planning

What is the maximum tax benefit that can be availed by investing in ELSS?

The maximum tax advantage that can be availed by investing in ELSS funds is 1.5 lakhs under section 80C of the income tax act. Any amount invested above 1.5 lakh would not qualify as an eligible investment for the purpose of claiming a tax deduction.

How risky are ELSS funds?

Like all other market-linked funds, ELSS funds are also subject to market risk as it invests in equity and equity-related instruments.

I have already exhausted my 1.5 lakh limit investment, should I still invest in ELSS?

This would not be a good option as this will lock your investment for 3 years without giving any tax advantage. Your taxable income would remain the same due to no further deductions. One can instead invest in other mutual funds that provide better returns like equity funds, hybrid fund.

Who should invest in ELSS funds?

Individuals who are looking for inflation-beating returns in the long run and which provides tax benefit should invest in ELSS.

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