Equity · Category

Best ELSS Tax Saver Mutual Funds 2026

ELSS (Equity Linked Savings Scheme) is the only category of mutual fund that qualifies for a tax deduction, and it carries a three-year lock-in — the shortest of any tax-saving option under the ₹1.5 lakh limit. The deduction is available only if you file under the old tax regime; the new regime, which is the default, does not allow it. ELSS funds must hold at least 80% of their portfolio in equity, so they carry full equity risk.

The rules, in short

Tax deduction: Up to ₹1.5 lakh a year; Under Section 80C — renumbered Section 123 by the Income Tax Act 2025, effective FY 2026-27. The limit and the list of eligible investments are unchanged.
Which regime: Old regime only; The new tax regime is the default and does not permit this deduction. Under the new regime an ELSS investment gives no tax benefit — it is simply an equity fund with a lock-in.
Lock-in: 3 years; Shortest among tax-saving options: PPF is 15 years, NSC and tax-saver FDs are 5, NPS runs to age 60.
Lock-in on SIP: Per instalment; Each SIP instalment locks for 3 years from its own date, not from the date the SIP started. A SIP begun in April 2026 has its final instalment free only in 2030.
Tax on gains: 12.5% above ₹1.25 lakh; Long-term capital gains under Section 112A. The ₹1.25 lakh exemption is an annual aggregate across all your equity gains, not per fund. Because of the lock-in, every ELSS gain is long-term.
Equity exposure: Minimum 80%; SEBI category rule. Returns move with the equity market and can be negative over short periods.

All 46 ELSS Tax Saver funds, ranked

Ordered by three-year annualised return, computed from official AMFI NAV history. Three years is the ranking window because it is the shortest period an ELSS investor can actually hold for — the lock-in makes any shorter comparison hypothetical.

NAV as of 31 Aug 2026

Category average over 3Y: 13.3% a year across 43 funds with a full record.

#Fund1Y3Y ↓5Yvs catExpense

Median expense ratio in this category: 0.85%. Direct plans cost less than regular plans — the same fund appears once here, on its longest-running plan.

Not enough history to rank

These 3 funds do not yet have a full 3Y NAV record, so ranking them against the funds above would compare different periods.

BAJAJ FINSERV ELSS TAX SAVER FUND HDFC Long Term Advantage Plan Navi ELSS Tax Saver Fund

LIC MF ULIS plans are filed under ELSS in the AMFI taxonomy but are unit-linked insurance schemes rather than tax-saver mutual funds, and carry no comparable NAV record. They are not listed above.

What the three-year lock-in actually means

The lock-in attaches to each investment, not to the fund. A lump sum placed on 10 April 2026 can be redeemed on 10 April 2029. A monthly SIP is twelve separate investments a year, each with its own three-year clock — which is why a SIP started in 2026 is not fully liquid until 2030.

During the lock-in the units cannot be redeemed, switched or pledged. There is no premature exit at a penalty, as there is with a tax-saver FD. This is the trade for the shorter lock-in period.

Why the tax regime decides whether ELSS is a tax product at all

Since the new tax regime became the default, most filers no longer claim deductions. For someone on the new regime, an ELSS fund delivers no deduction — it remains a diversified equity fund, but one whose money is locked for three years, which a comparable open-ended equity fund is not.

For someone who files under the old regime and has not already exhausted the ₹1.5 lakh limit with EPF, insurance premiums, home-loan principal or children's tuition fees, the deduction applies. The limit is shared across all of those, so the headroom is often smaller than it looks.

How to read the table below

Returns are annualised and computed from our own AMFI NAV history rather than taken from a fund factsheet, so every fund on this page is measured to the same date on the same basis. The category average is calculated across the same set.

Expense ratio is the annual cost, already deducted from the NAV you see — a fund returning 15% gross at a 1.2% expense ratio shows 13.8%. Direct plans cost less than regular plans because they carry no distributor commission.

Past returns describe what happened; they are not a forecast. Two funds with identical three-year numbers can have reached them through very different levels of volatility.

Frequently asked questions

Is ELSS still worth it under the new tax regime?+

Under the new tax regime there is no deduction for ELSS, so it offers no tax advantage over any other equity fund — while still locking your money for three years. The deduction of up to ₹1.5 lakh applies only if you file under the old regime.

How long is the ELSS lock-in period?+

Three years from the date of each investment. It is the shortest lock-in of any option under the ₹1.5 lakh limit — PPF locks for 15 years, NSC and tax-saver fixed deposits for 5.

If I invest in ELSS through a SIP, when can I redeem?+

Each SIP instalment is locked for three years from its own date. A SIP started in April 2026 has its first instalment free in April 2029 and its twelfth in March 2030. The SIP does not unlock as a single block.

How much tax do I pay when I sell ELSS units?+

Gains are long-term by definition, because of the three-year lock-in. Long-term capital gains on equity funds are taxed at 12.5% on the amount above ₹1.25 lakh in a financial year, under Section 112A. The ₹1.25 lakh exemption is an annual aggregate across all your equity gains.

Is Section 80C still called 80C?+

The Income Tax Act 2025 renumbered it as Section 123 with effect from FY 2026-27. The ₹1.5 lakh limit and the eligibility of ELSS are unchanged; only the section number moved.

How many ELSS funds are there, and how are they ranked here?+

Every open-ended ELSS fund currently active in AMFI data appears on this page. They are ordered by three-year annualised return computed from official NAV history — three years being the shortest period the lock-in permits an investor to hold. Funds without a full three-year record are listed separately rather than ranked against funds that have one.

How this page is produced

Every figure above is computed from our own archive of the official AMFI NAV file, going back to 2006, to NAV dated 31 Aug 2026. Nothing here is copied from a factsheet or a third-party summary. The full method is published, including its limitations.

Because every fund here is measured to the same date on the same basis, the column is directly comparable — which a page assembled from individual factsheets is not. Returns are annualised over 3Y and the category average is calculated across the same set of funds shown above. Tax rules summarised on this page are general and current for FY 2026-27 — confirm your own position with a qualified tax adviser.

Written and maintained by Azad Mohammed, who built the pipeline these numbers come out of. Found an error? Tell us — corrections are made and the page rebuilds within the hour.

This page describes what each fund has done. It is not investment advice and not a recommendation to buy or sell any scheme. Arthkar is not a SEBI-registered investment adviser and does not provide or arrange investment advice. Mutual fund investments are subject to market risk; read all scheme related documents carefully.