Top 5 Best ELSS Mutual Funds in India for Tax Saving 2024

By WealthMarg Team / June 7, 2026

Here’s why ELSS is a game-changer for Indian millennials:

• Tax savings up to ₹46,800: Invest **₹1.5 lakh** in ELSS, and you can reduce your taxable income by the same amount (under Section 80C). If you’re in the **30% tax bracket**, that’s **₹46,800 saved**—enough for a weekend trip to Bali or a down payment on a bike.
• Potential for higher returns: While PPF gives you **~7% returns** and FDs **~6%**, ELSS has historically delivered **12–15% returns over 5+ years**. That’s the power of compounding in the stock market.
• Shortest lock-in period: Just **3 years**—unlike PPF (15 years) or NSC (5 years). After 3 years, you can withdraw or stay invested for even higher returns.
• SIP-friendly: You don’t need a lump sum. Start a **₹500/month SIP** in ELSS and save tax while building wealth—just like your daily chai habit, but with better returns.

Think of ELSS as a **two-in-one deal**: You save tax today and grow your money for tomorrow. The only catch? Since it’s linked to the stock market, returns aren’t guaranteed. But if you stay invested for **5+ years**, the risk drops significantly.

ELSS vs. Other 80C Options: Which One Wins?

Most Indians default to PPF or insurance policies for tax savings because they’re “safe.” But are they really the best? Let’s compare ELSS with other popular 80C options:

Option	Lock-in Period	Returns (Approx.)	Tax Benefit	Risk Level	Best For
ELSS	3 years	12–15%	Yes (80C)	High (market-linked)	Long-term wealth + tax savings
PPF	15 years	7–7.5%	Yes (80C)	Low (govt-backed)	Safe, long-term savings
Tax-Saving FD	5 years	6–7%	Yes (80C)	Low (bank-backed)	Risk-averse investors
NSC	5 years	6.8–7%	Yes (80C)	Low (govt-backed)	Safe, fixed returns
ULIPs	5 years	8–10% (varies)	Yes (80C)	Medium (market + insurance)	Insurance + investment (but high fees)
Life Insurance (Traditional)	Policy term (10–20 years)	4–6%	Yes (80C)	Low (insurance)	Pure protection (not investment)

Key takeaway: If you’re young (20s–30s) and can handle some risk, ELSS gives you the **best mix of tax savings, returns, and liquidity**. PPF is great for safety, but it locks your money for **15 years**—not ideal if you might need it sooner. FDs and NSC give lower returns, and ULIPs come with hidden fees. ELSS is the only option that lets you **grow wealth while saving tax**.

Top 5 Best Tax-Saving Mutual Funds (ELSS) in India (2024)

Not all ELSS funds are created equal. Some consistently outperform others, while some charge high fees or take unnecessary risks. We’ve shortlisted the **top 5 ELSS funds** based on **5-year returns, fund manager track record, expense ratio, and risk-adjusted performance**. Here’s the list (data as of **June 2024**):

1. Mirae Asset Tax Saver Fund

   • 5-year return: **~18.5%** (vs. Nifty 50’s **~15%**)
   • Expense ratio: **0.59%** (low = more money in your pocket)
   • Why it’s great: One of the most consistent performers, with a **diversified portfolio** (top holdings: HDFC Bank, ICICI Bank, Reliance). Ideal for beginners.
   • Minimum SIP: **₹500/month**

2. Axis Long Term Equity Fund

   • 5-year return: **~17.8%**
   • Expense ratio: **0.64%**
   • Why it’s great: Focuses on **high-quality large-cap stocks** (like TCS, Infosys, Bajaj Finance). Lower risk than small-cap funds.
   • Minimum SIP: **₹500/month**

3. Quant Tax Plan

   • 5-year return: **~22%** (highest in the category)
   • Expense ratio: **0.57%**
   • Why it’s great: Uses **quantitative models** to pick stocks, reducing human bias. Higher risk but higher rewards.
   • Minimum SIP: **₹500/month**

4. Canara Robeco Equity Tax Saver Fund

   • 5-year return: **~17.2%**
   • Expense ratio: **0.62%**
   • Why it’s great: A **balanced fund** with a mix of large, mid, and small-cap stocks. Good for moderate risk-takers.
   • Minimum SIP: **₹1,000/month**

5. DSP Tax Saver Fund

   • 5-year return: **~16.5%**
   • Expense ratio: **0.82%**
   • Why it’s great: One of the **oldest ELSS funds** (launched in 2006) with a **proven track record**. Invests in **blue-chip stocks** (like HDFC, ITC, L&T).
   • Minimum SIP: **₹500/month**

Pro tip: Don’t just pick a fund based on past returns. Check the **fund manager’s experience**, the **expense ratio** (lower = better), and whether the fund’s **investment style** matches your risk appetite. For example, if you’re conservative, go for **Axis Long Term Equity Fund**. If you’re aggressive, **Quant Tax Plan** might suit you.

How to Invest in ELSS: A Step-by-Step Guide (Even If You’re a Beginner)

Investing in ELSS is easier than ordering food on Swiggy. Here’s how to do it in **5 simple steps**—whether you’re using **Zerodha, Groww, or your bank’s app**:

Step 1: Open a Demat/KYC Account (If You Don’t Have One)

You need a **Demat account** to buy mutual funds. If you don’t have one, sign up on:

• Zerodha Coin (free, user-friendly)
• Groww (great for beginners)
• Paytm Money (simple UPI-based investing)

KYC takes **5 minutes** (PAN + Aadhaar + bank details). Once done, you’re ready to invest.

Step 2: Choose Your ELSS Fund

Pick **1–2 funds** from the list above. If you’re unsure, start with **Mirae Asset Tax Saver Fund** (consistent performer) or **Axis Long Term Equity Fund** (lower risk).

Step 3: Decide Between Lump Sum or SIP

• Lump sum: Invest **₹1.5 lakh at once** (best if you have the money now and want to max out 80C).
• SIP (Recommended): Start a **₹12,500/month SIP** for 12 months to hit **₹1.5 lakh**. This averages out market ups and downs (called **rupee-cost averaging**).

Step 4: Invest via Your App

Here’s how to invest on **Groww** (steps are similar for Zerodha/Paytm):

1. Open the Groww app and search for your chosen ELSS fund (e.g., “Mirae Asset Tax Saver Fund”).
2. Click “Invest Now.”
3. Choose **SIP or Lump Sum**.
4. Enter the amount (e.g., **₹12,500/month for SIP**).
5. Select the date (e.g., **5th of every month**).
6. Link your bank account via **UPI** (instant, no OTP hassles).
7. Click “Start SIP” or “Invest Now.” Done!

Step 5: Track and Stay Invested

• Set a **calendar reminder** for your SIP date.
• Check your fund’s performance **once a year** (don’t panic over short-term dips).
• After **3 years**, you can withdraw or stay invested for higher returns.

Bonus tip: Use the **”Auto-Pay”** feature in your bank app to ensure your SIP never fails. Missing a SIP is like skipping a gym session—it adds up over time.

Common ELSS Mistakes to Avoid (So You Don’t Lose Money)

ELSS is simple, but many investors make costly mistakes. Here’s what to **avoid**:

1. Redeeming after 3 years (just because you can):

   ELSS has a **3-year lock-in**, but that doesn’t mean you should withdraw immediately. The stock market grows over time—**staying invested for 5+ years** reduces risk and boosts returns. Think of it like a **fixed deposit**: You wouldn’t break it after 3 years if it’s giving **12% returns**, right?

2. Investing only in March (last-minute tax panic):

   Many Indians invest in ELSS in **February–March**, when the market is often high. Instead, start a **SIP in April** and invest **₹12,500/month** to average out market fluctuations.

3. Choosing ELSS based on recent returns:

   A fund that gave **30% returns last year** might not repeat it. Look at **5-year returns** and the **fund manager’s track record**. Past performance ≠ future results.

4. Ignoring the expense ratio:

   A **1% higher expense ratio** can eat into your returns over time. For example, a **₹1 lakh investment** with a **1.5% expense ratio** vs. **0.5%** could mean **₹50,000 less** in 10 years.

5. Not diversifying:

   Don’t put all your **₹1.5 lakh 80C limit** into ELSS. Split it between **ELSS (₹50,000), PPF (₹50,000), and NPS (₹50,000)** for a balanced approach.

Key Takeaways: ELSS in a Nutshell

• ELSS is the **only 80C investment** that gives **tax savings + market-linked returns + 3-year lock-in**.
• Historical returns: **12–15% over 5+ years** (vs. PPF’s **7%** or FD’s **6%**).
• Best ELSS funds (2024): **Mirae Asset Tax Saver, Axis Long Term Equity, Quant Tax Plan**.
• Start a **₹500/month SIP**—you don’t need a lump sum.
• Avoid **last-minute March investments** and **redeeming after 3 years**. Stay invested for **5+ years**.
• Compare **expense ratios** (lower = better) and **fund manager track records**.

Your 5-Step Action Plan (Do This Today!)

1. Open a Demat account:

   Sign up on **Groww or Zerodha** (5-minute KYC). Use this link for **Groww** (no referral code, just a trusted platform).

2. Pick an ELSS fund:

   Choose **1 fund** from our list (e.g., Mirae Asset Tax Saver).

3. Start a SIP:

   Set up a **₹500/month SIP** (or more if you can). Use **UPI for instant payments**.

4. Set a calendar reminder:

   Mark your **SIP date** (e.g., 5th of every month) so you never miss it.

5. Track once a year:

   Check your fund’s performance in **January** (not daily!). Stay invested for **5+ years**.

ELSS FAQ: Real Questions Indians Ask

1. Is ELSS better than PPF for tax saving?

Answer: It depends. PPF is **safer** (govt-backed, **7% returns**) but locks your money for **15 years**. ELSS is **riskier** (market-linked) but gives **higher returns (12–15%)** and a **3-year lock-in**. If you’re young and can handle risk, ELSS is better for **wealth growth**. If you’re risk-averse,

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