Best ELSS Funds for 2026

Equity Linked Savings Schemes (ELSS) are a popular way for Indians to save on taxes while also growing their money. These are mutual funds that invest mainly in stocks (equities).

The best part? ELSS funds not only reduce your taxable income under Section 80C of the Income Tax Act, but they also give you a chance to earn higher returns because your money is linked to the stock market.

Compared to other tax-saving options, ELSS funds have the shortest lock-in period, just three years. This means you can take out your money after that time.

For people with long-term goals, ELSS funds offer a double benefit — they save tax and help build wealth over time. By investing regularly, you can move closer to financial freedom step by step.

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Best ELSS Funds in India 2026

Here are some ELSS funds that investors often consider for long-term growth and tax savings:

• Mirae Asset Tax Saver Fund
• Canara Robeco Equity Tax Saver Fund
• Axis Long Term Equity Fund
• DSP Tax Saver Fund
• Kotak Tax Saver Fund
• ICICI Prudential ELSS Fund
• SBI Long Term Equity Fund
• HDFC Tax Saver Fund

Why These Funds Stand Out

Mirae Asset Tax Saver Fund: This fund is popular because it has been consistent and has invested in strong companies. It puts money into good-quality businesses from different industries, which helps balance growth and safety. For anyone who wants to save on taxes and grow their money at the same time, this fund is a reliable choice.

Canara Robeco Equity Tax Saver Fund: This fund is known for its steady performance and careful risk management. It follows a disciplined investment style, making it a good option for people who want to build wealth slowly and safely, with fewer ups and downs.

Axis Long Term Equity Fund: Axis was once the most sought-after ELSS fund, and though it has seen ups and downs, it remains a strong contender. It focuses on high-quality businesses, making it a good choice for investors who can hold through cycles.

DSP Tax Saver Fund: DSP has built a reputation for active management, and this ELSS scheme is no different. It invests across market caps and sectors, giving investors diversified exposure. It works well for those who want a balanced yet growth-oriented tax-saving option.

Kotak Tax Saver Fund: This fund provides a mix of large, mid, and small companies. By spreading investments, it reduces risk while still capturing opportunities in high-growth sectors. It is a strong choice for investors seeking diversification.

ICICI Prudential ELSS Fund: ICICI’s scheme blends equity with a risk-managed approach. It is known for consistency and disciplined allocation, which suits investors looking for stability alongside tax benefits.

SBI Long Term Equity Fund: This fund is one of the oldest in the ELSS space. Over the years, it has rewarded investors who stayed invested through market cycles. It is ideal for those who want a trusted name with long-term results.

HDFC Tax Saver Fund: HDFC has a long history of managing equity schemes. This ELSS option focuses on companies with strong fundamentals. It is suited for investors who value traditional, research-backed stock picking.

Benefits of ELSS Funds

• Shortest lock-in: At three years, ELSS has the lowest lock-in compared to PPF and NSC.
• Market-linked returns: Unlike fixed returns, ELSS offers the potential for higher growth over time.
• Tax deduction: Investments qualify for up to ₹1.5 lakh deduction under Section 80C.
• Long-term wealth creation: Equity exposure allows compounding to work effectively.
• Flexibility: Investors can choose the lump sum or SIP mode based on preference.

How to Use ELSS Funds Effectively

• Start early in the year: Don’t wait until March to invest just to save tax. Starting early with monthly SIPs helps you avoid last-minute stress and take advantage of rupee-cost averaging.
• Choose SIPs for discipline: Investing a small amount every month keeps things simple and helps you stay consistent over time.
• Link your investments to goals: Use ELSS not just to save tax, but also to reach long-term goals like higher education, buying a house, or retirement.
• Stay invested beyond the lock-in period: Even though you can withdraw after three years, staying for 7–10 years gives stronger returns.
• Diversify your investments: One ELSS fund is enough for tax saving, but combine it with other equity funds to keep your portfolio balanced.

Why ELSS Funds Suit Indian Investors

For Indian investors, ELSS funds are special because they offer two big benefits — they help you save tax and also grow your money through the stock market.

As more people learn about investing, many first-time investors are starting their journey with ELSS funds. The three-year lock-in period encourages them to stay invested, which helps avoid panic when the stock market moves up and down.

For middle-class investors, ELSS funds are popular because they save taxes and build wealth at the same time. Unlike regular fixed deposits that give low returns, ELSS funds have much higher growth potential, which is important in a country where inflation can make fixed returns less valuable over time.

Risks to Remember

Even though ELSS funds have great benefits, they’re not completely risk-free. The stock market can go up and down, so the value of your investment might fall for a while. But if you stay invested for a longer period — around five to ten years — these ups and downs usually even out, and you can earn steady returns.

The key lesson? Be patient. Good things take time in investing.

Conclusion

ELSS funds are one of the best ways for Indian investors to save taxes and build wealth at the same time. They offer the growth potential of stocks with a short lock-in period, making them stand out from other options.

If you start early, invest regularly, and stay invested even after the lock-in period, ELSS funds can help you build long-term wealth while reducing your taxes.

In the end, these funds reward discipline, patience, and clear financial goals — three things that every successful investor needs.