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Best ELSS Funds (Tax Saving) in India

By FundSageAI Quantitative Research Team•Data computed as of 20 September 2026

What is a ELSS Fund?

Very High Volatility

ELSS (Equity Linked Savings Scheme) Funds invest at least 80% of assets in equity and equity-related instruments, and are the only mutual fund category that qualifies for a tax deduction under Section 123 (read with Schedule XV) of the Income-tax Act, 2025 — the successor to the erstwhile Section 80C of the Income Tax Act, 1961 — up to ₹1.5 lakh per financial year. In exchange, every ELSS investment (including each SIP installment) is locked in for 3 years, the shortest mandatory lock-in among comparable tax-saving instruments like PPF (15 years) or NSC (5 years).

SEBI Category Profile & Regulatory Benchmark

SEBI Mandate
Minimum 80% in equity; eligible for Section 80C deduction; statutory 3-year lock-in
Standard Benchmark
NIFTY 500 TRI / S&P BSE 500 TRI
Recommended Horizon
3-5+ Years
Tax Treatment (FY 2025-26)
Section 80C deduction up to ₹1.5L (old regime) • 12.5% LTCG above ₹1.25L after 36M lock-in

Ideal for

Investors looking to save tax under the old tax regime's Section 123/Schedule XV deduction (formerly Section 80C) while staying invested in equity, with the shortest lock-in among these options.

FundExp. Ratio3 Year RR
Sundaram Long Term Tax Advantage Fund Series IVDG1.01%26.62%
Sundaram Long Term Tax Advantage Fund Series IIIDG1.01%25.65%
quant ELSS Tax Saver FundDG1.21%23.09%

Growth of ₹1,00,000 over 3 years

Illustrative — assumes a steady return equal to each fund's 3-year rolling CAGR. Not a guarantee of actual or future performance.

Sundaram Long Term Tax Advantage Fund Series IV

₹2.0L

26.62% CAGR

Sundaram Long Term Tax Advantage Fund Series III

₹2.0L

25.65% CAGR

quant ELSS Tax Saver Fund

₹1.9L

23.09% CAGR

Key Terms

Section 123 / Schedule XV (formerly Section 80C)

The Income-tax Act, 2025 provision (Section 123, read with Schedule XV) allowing deductions up to ₹1.5 lakh/year for specified investments, including ELSS, PPF, EPF, and life insurance premiums — the successor to Section 80C of the old Income Tax Act, 1961, still commonly referenced by that legacy name. Available only under the old tax regime.

Lock-in Period

The minimum duration units must be held before they can be redeemed — 3 years for ELSS, calculated separately for each SIP installment rather than from the first investment date.

Frequently Asked Questions

How are ELSS Tax-Saving Mutual Funds ranked on FundSageAI?

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ELSS schemes qualifying for tax deductions under Section 123 (read with Schedule XV) of the Income-tax Act, 2025 / Section 80C (applicable only under the old tax regime, subject to the aggregate ₹1,50,000 annual cap) are ranked by 3-year and 5-year rolling returns. Since investments carry a statutory 3-year lock-in per installment, our ranking emphasizes schemes with superior 36-month holding period consistency.

Is ELSS better than PPF for tax saving?

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They serve different purposes. ELSS has a much shorter 3-year lock-in versus PPF's 15 years, and equity exposure gives higher growth potential — but PPF offers government-backed, tax-exempt interest with zero market risk. Many investors use both: PPF for guaranteed long-term savings, ELSS for equity growth with a tax benefit.

Can I withdraw my ELSS investment after 3 years?

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Yes — units become redeemable exactly 3 years after each purchase date (each SIP installment has its own 3-year lock-in). There's no requirement to withdraw at 3 years; you can stay invested longer if your goals don't need the money yet.

Is ELSS tax deduction available under the new tax regime?

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No. The Section 123/Schedule XV deduction (formerly Section 80C), including ELSS, is only available if you opt for the old tax regime. Under the new (default) tax regime, ELSS investments don't reduce your taxable income, though gains are still taxed the same way as other equity funds.

How often is this ranking updated?

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Rankings are recomputed weekly from NAV history. The "Data as of" line above the table shows when these numbers were last refreshed.

Is this financial advice?

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No. This page shows category rankings by historical rolling return only. It is not personalized investment advice and does not account for your goals or risk tolerance. Past performance is not indicative of future results.

FundSageAI is an analytics platform. Rankings on this page are informational only and do not constitute personalized investment advice. Past performance is not indicative of future results. Consult a SEBI-registered investment advisor before investing.