Best Tax Saving Mutual Funds - Consider the best performing tax saving mutual funds to invest in 2024 with Scripbox.com. Find the list of best tax saving mutual funds in India on the basis of Returns, Latest Nav, Ratings, Performance etc
Learn how Scripbox Recommends funds| Fund Name | 3Y Returns | Expense Ratio |
|---|---|---|
 | 16.6% | 0.58% |
 | 20.9% | 0.74% |
 | 25.4% | 0.93% |
 | 19.4% | 1.01% |
 | 23.1% | 1.08% |
 | 18.0% | 0.64% |
 | 20.5% | 0.99% |
 | 20.7% | 0.96% |
Note : *NA implies that Fund is relatively new. Not enough data available
Invest in these funds with automated best practices like quarterly scans, updates & tax-optimised withdrawals
Below are the best tax saving mutual funds in india:
Mirae Asset ELSS Tax Saver Fund Direct (G) is a Equity fund that has delivered a 1 Year return of 30.6%, a 3 Years return of 16.6% and a 5 Years return of 21.3%. The fund has an expense ratio of 0.6% and an AUM of ₹24896 crores as of 2024-11-29. It was Launched on 2015-12-28. The minimum SIP investment is ₹500 and the minimum lump sum investment is ₹500. The fund allocates 98.98% to equities, 0.00% to debt and 1.02% to other assets.
DSP ELSS Tax Saver Fund Direct (G) is a Equity fund that has delivered a 1 Year return of 38.4%, a 3 Years return of 20.9% and a 5 Years return of 22.4%. The fund has an expense ratio of 0.7% and an AUM of ₹16841 crores as of 2024-11-29. It was Launched on 2013-01-01. The minimum SIP investment is ₹500 and the minimum lump sum investment is ₹500. The fund allocates 96.72% to equities and 3.28% to other assets.
SBI Long Term Equity Fund Direct (G) is a Equity fund that has delivered a 1 Year return of 41.7%, a 3 Years return of 25.4% and a 5 Years return of 25.1%. The fund has an expense ratio of 0.9% and an AUM of ₹27559 crores as of 2024-11-29.The minimum SIP investment is ₹500 and the minimum lump sum investment is ₹500. The fund allocates 91.11% to equities and 8.89% to other assets.
Nippon India ELSS Tax Saver Fund Direct (G) is a Equity fund that has delivered a 1 Year return of 32.9%, a 3 Years return of 19.4% and a 5 Years return of 18.6%. The fund has an expense ratio of 1.0% and an AUM of ₹15673 crores as of 2024-11-29.The minimum SIP investment is ₹500 and the minimum lump sum investment is ₹500. The fund allocates 98.47% to equities, 0.01% to debt and 1.52% to other assets.
HDFC ELSS Tax Saver Fund Direct (G) is a Equity fund that has delivered a 1 Year return of 34.7%, a 3 Years return of 23.1% and a 5 Years return of 21.3%. The fund has an expense ratio of 1.1% and an AUM of ₹15935 crores as of 2024-11-29. It was Launched on 2013-01-01. The minimum SIP investment is ₹500 and the minimum lump sum investment is ₹500. The fund allocates 92.52% to equities, 0.30% to debt and 7.18% to other assets.
Bandhan ELSS Tax Saver Fund Direct (G) is a Equity fund that has delivered a 1 Year return of 23.6%, a 3 Years return of 18.0% and a 5 Years return of 23.1%. The fund has an expense ratio of 0.6% and an AUM of ₹6900 crores as of 2024-11-29.The minimum SIP investment is ₹500 and the minimum lump sum investment is ₹500. The fund allocates 96.79% to equities, 0.02% to debt and 3.19% to other assets.
Franklin India ELSS Tax Saver Fund Direct (G) is a Equity fund that has delivered a 1 Year return of 34.7%, a 3 Years return of 20.5% and a 5 Years return of 21.4%. The fund has an expense ratio of 1.0% and an AUM of ₹6833 crores as of 2024-11-29. It was Launched on 2013-01-01. The minimum SIP investment is ₹500 and the minimum lump sum investment is ₹500. The fund allocates 97.06% to equities and 2.94% to other assets.
Bank of India ELSS Tax Saver Fund Direct (G) is a Equity fund that has delivered a 1 Year return of 36.2%, a 3 Years return of 20.7% and a 5 Years return of 26.5%. The fund has an expense ratio of 1.0% and an AUM of ₹1436 crores as of 2024-11-29.The minimum SIP investment is ₹500 and the minimum lump sum investment is ₹500. The fund allocates 93.80% to equities, 0.04% to debt and 6.16% to other assets.
A tax-saving mutual fund provides the benefits of investing in equity securities along with a tax deduction. Investors seeking a long term investment coupled with benefits equity and tax saving must consider this fund. Now the question arises which is the best tax saving mutual fund and how to select it. Firstly, ensure that the fund meets your investment goals. Secondly, consider its NAV, risk, historical returns, fund manager’s portfolio while investing.
| Fund Name | AMC Name | 3 Year Returns |
| Mirae Asset ELSS Tax Saver Fund Direct (G) | Mirae Asset Management | 13.9% |
| Canara Robeco ELSS Tax Saver Direct (G) | Canara Robeco Asset Management | 13.6% |
| DSP ELSS Tax Saver Fund Direct (G) | DSP Investment Managers | 18.5% |
| Axis ELSS Tax Saver Fund Direct (G) | Axis Asset Management | 6.8% |
| ICICI Prudential ELSS Tax Saver Direct (G) | ICICI Prudential Asset Management | 13.4% |
| SBI Long Term Equity Fund Direct (G) | SBI Funds Management | 23% |
| Baroda BNP Paribas ELSS Tax Saver Fund Direct (G) | Baroda BNP Paribas Asset Management | 15.9% |
| Fund Name | AMC Name | 3 Year Returns |
| Mirae Asset Tax Saver Fund Regular (G) | Mirae Asset Management | 12.7% |
| Canara Robeco Equity Taxsaver fund Regular (G) | Canara Robeco Asset Management | 12.2% |
| DSP Tax Saver Fund Regular (G) | DSP Investment Managers | 17.4% |
| Axis Long Term Equity Fund Regular (G) | Axis Asset Management | 6% |
| ICICI Prudential Long Term Equity Fund Tax Saving Regular (G) | ICICI Prudential Asset Management | 12.6% |
| SBI Magnum Long Term Equity Scheme Regular (G) | SBI Funds Management | 22.2% |
| Baroda BNP Paribas ELSS Fund Regular (G) | Baroda BNP Paribas Asset Management | 14.5% |
Tax saving mutual funds are just like any other mutual fund with the only difference of bearing a tax benefit. An investment made towards a tax saving mutual fund is allowed as a deduction under section 80C of the Income Tax Act, 1961.
Majorly tax saving mutual funds are ELSS wherein the investment is equity-oriented and the lock-in period is 3 years.
The process of investing in a mutual fund can be listed in just 4 steps
Step 1 – Investors pool their investments with a fund manager
Step 2 – The fund manager invests the pool of investment in various securities
Step 3 – These securities generate returns for the investors
Step 4 – The returns are paid back to the investors or invested back in the fund, as chosen by the investors
The securities selected for investment belong to different industries and sectors. This is done to ensure even if one industry generates low or no returns, other industries can balance the expected returns.
| Industry | % of the total investment |
| Automotive | 23% |
| Banking | 24% |
| Power | 17% |
| FMCG | 19% |
| Hospitality | 17% |
Tax saving mutual funds have a lock-in period of 3 years from the investment until the maturity of the funds. In case the investment is made through SIP, the lock-in period is calculated for every installment of investment.
Example
If SIP is made monthly from January 2020, then the installment of January 2020 will be matured in January 2023. For then the installment of February 2020 will be matured in February 2023
The redemption of investments is possible only for the unlocked units at the current NAV price for the units available for redemption at maturity. The investor needs to submit a withdrawal form to the fund manager and the amount will be credited to the account.
Tax saving mutual funds or Equity Linked Savings Schemes are a better option of investments than other tax saving schemes. The features of ELSS are listed below.
No limit on Maximum Investment. Minimum Investment Amount differs for fund houses. However mostly the minimum investment amount is Rs 500 only An entry load and exit load applies to ELSS schemes. These are fees charged by the fund managers on purchase/sale/redemption/transfer of the fund units by the investors. Deduction on investment is allowed under section 80C up to Rs 1.5 lakh
Investment in ELSS funds exposed to market fluctuations and are risky. However, the risk level depends on the investor and his understanding of risk. Risk is a factor which is dependent on what is the limit of an individual given his spending, cost of living and income.
Investment in ELSS mutual funds are ideal investment option for investors who wish to save tax and earn a higher return at the same time.
The key benefits of investing in ELSS are listed below:
ELSS allows an investor to benefit save money and enjoy the growth and returns associated with securities in the ELSS portfolio. While other saving schemes offer an average of 8% returns, ELSS provides better returns being a good portfolio with diverse and quality stocks.
ELSS allows an investor to invest as low as Rs 500 per month, turning small savings into an investment developing habit of continuous savings.
One of the major reasons to invest in ELSS is the tax benefit it carries. The principal amount of investment is allowed as a deduction u/s 80C along with tax benefits of maturity amount and returns earned.
ELSS allows an investor to invest monthly through SIPs and thus eliminating the need to invest a huge amount at once.
These investments are managed by professional fund managers, hence a layman having less knowledge about the market and its trends can invest freely.
A portfolio of various securities from different industries and sectors is made, hence minimizing the market risk of investing in the equity market
The principal amount invested in ELSS is allowed as a deduction under section 80C up to Rs 1.5 lakh of the Income Tax Act, 1961.
Long-Term Capital Gains (LTCG) tax is applicable on ELSS funds as the lock-in period is 3 years. LTCG @ 10% is levied on the capital gain earned over Rs 1 lakh
Other than ELSS , there are other tax saving investment options like fixed deposits, public provident fund, national pension scheme and others.
We have mentioned a comparison below to help understand advantages and disadvantages over ELSS vs other schemes
| Particulars | ELSS | Public Provident Fund | National Pension Scheme | Fixed Deposits |
| Rate of interest | 12% to 14% | 7.10% p.a. | 8% to 10% | 7% to 9% varies Bank to Bank |
| Risk | Depends on market fluctuation | Low Risk | Low Risk | Low Risk |
| Lock-in Period | 3 years | 5 years | Till Retirement | 5 years |
| Tax Advantage on Investment | Principal amount deductible u/s 80C deduction up to Rs 1.5 lakh | Principal amount deductible u/s 80C deduction up to Rs 1.5 lakh | Principal amount deductible u/s 80C deduction up to Rs 1.5 lakh | Principal amount deductible u/s 80C deduction up to Rs 1.5 lakh |
| Tax on Returns | 10% LTCG | Taxable | Partially Taxable | Taxable |
Among all investment schemes ELSS is suitable for an investor who has a tolerance for risk and a long-term financial goal to save taxes. An investor who wishes to invest a fixed or variable amount monthly can also choose to invest through SIP.
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 created, maturity value of the SIP investments made.
There is no upper limit for investing in ELSS. But while considering tax saving schemes, an investment in ELSS tax saving mutual funds are allowed as a deduction up to Rs 1.5 lakh only
Yes, withdrawal of tax saving mutual funds is allowed at the maturity of the funds. The units available for redemption can be redeemed. But a premature withdrawal of funds before 3 years of lock-in period is not allowed
Being tax saver schemes ELSS are the funds which provide a tax advantage. The investments made are allowed as a deduction up to Rs 1.5 lakh and the capital gains up to Rs 1 lakh are tax-free.
ELSS tax saving mutual funds are exposed to market fluctuations and are risky. However, the risk level depends on the investor and his understanding of risk. Risk is a factor which is dependent on what is the limit of an individual given his own spending, cost of living and income.