🏦 What is ELSS & Why You Should Invest?
Best ELSS Funds to Invest in FY 2025–26 can help you save tax under Section 80C and build long-term wealth. These equity-linked savings schemes (ELSS) are among the most efficient tax-saving investments available today.
✅ Benefits of ELSS Mutual Funds
- 💰 Save up to ₹1.5 lakh under Section 80C
- ⏳ Shortest lock-in among all 80C investments (3 years)
- 📈 High return potential, as funds are linked to equity markets
- 🧾 Easy online investing via SIP or lump sum
- 💼 Professional fund management
❝ If you’re looking for a tax-saving investment that also builds long-term wealth, ELSS is your best bet. ❞
📌 Key Factors to Pick the Best ELSS Fund
📝 Checklist for Choosing an ELSS Fund
- Past Returns: Focus on 3-year and 5-year performance
- Expense Ratio: Lower fees mean better long-term returns
- AUM (Assets Under Management): High AUM often signals investor trust
- Fund Manager’s Experience: More experienced = better crisis management
- Portfolio Diversification: Balanced across sectors and market caps
📈 Top 7 Best ELSS Funds to Invest in FY 2025–26
✅ Updated as of July 2025. Based on 5-year performance, expense ratios, and risk-adjusted returns.
1️⃣ Quant ELSS Tax Saver Fund
- 3-Year Return: 24.8%
- 5-Year Return: 21.1%
- Expense Ratio: 0.38%
- Risk Level: High
Why invest? An aggressive ELSS fund that performs exceptionally well in bull markets.
Caption: Quant ELSS outperforms during bullish phases.
2️⃣ Axis Long Term Equity Fund
- 3-Year Return: 13.5%
- 5-Year Return: 12.8%
- Expense Ratio: 0.74%
- Risk Level: Moderate
Why invest? A conservative choice with a consistent long-term track record.
3️⃣ Mirae Asset Tax Saver Fund
- 3-Year Return: 20.3%
- 5-Year Return: 17.6%
- Expense Ratio: 0.39%
- Risk Level: Moderate to High
Why invest? Balanced and reliable, suitable for investors looking for growth and consistency.
Compare Mirae ELSS on Value Research
4️⃣ Canara Robeco Equity Tax Saver Fund
- 3-Year Return: 17.4%
- 5-Year Return: 16.3%
- Expense Ratio: 0.65%
- Risk Level: Moderate
Why invest? Balanced fund with efficient risk management and consistent performance.
5️⃣ Kotak Tax Saver Fund
- 3-Year Return: 15.9%
- 5-Year Return: 14.6%
- Expense Ratio: 0.53%
- Risk Level: Moderate
Why invest? Trusted fund with a solid long-term history and diversified portfolio.
6️⃣ DSP Tax Saver Fund
- 3-Year Return: 18.8%
- 5-Year Return: 15.7%
- Expense Ratio: 0.72%
- Risk Level: Moderate
Why invest? Blends large-cap safety with mid-cap growth. A good all-rounder.
7️⃣ ICICI Prudential Long Term Equity Fund
- 3-Year Return: 14.2%
- 5-Year Return: 13.9%
- Expense Ratio: 0.78%
- Risk Level: Moderate
Why invest? Strong brand reputation and consistent performance over the years.
📊 ELSS SIP Calculator Example
If you invest ₹5,000 monthly in an ELSS fund for 5 years at 12% annual returns:
- Total Invested: ₹3,00,000
- Estimated Value: ₹4,15,000
- Tax Saved: ₹1.5 lakh over 5 years
Caption: ELSS SIP can yield high long-term returns with tax benefits.
⚖️ ELSS vs Other 80C Tax-Saving Options
| Investment | Lock-in | Returns | Tax on Maturity | Risk |
|---|---|---|---|---|
| ELSS | 3 years | 10–15% | 10% LTCG | Medium to High |
| PPF | 15 years | 7.1% | Tax-free | Low |
| FD | 5 years | 6–7% | Taxable | Low |
| NPS | Till age 60 | 8–10% | Partially taxable | Medium |
💬 “ELSS beats traditional options like PPF and FDs in returns, but you should be ready to ride market ups and downs.”
🔁 SIP vs Lump Sum in ELSS – Which Is Better?
💳 SIP (Systematic Investment Plan)
- Reduces market timing risk
- Easier to maintain discipline
- Ideal for salaried individuals
💼 Lump Sum
- Suitable if you have bonus or idle funds
- Best when the market is low
- Invest at once and forget for 3 years
❝ SIP is generally more beginner-friendly and offers better rupee-cost averaging. ❞
🧠 Risks of Investing in ELSS
- 🔄 Market Risk: Returns fluctuate with market movements
- 🔒 Lock-in Period: You can’t withdraw before 3 years
- ⚠️ Fund Performance: May vary across fund managers and sectors
📥 How to Start Investing in ELSS?
- Pick a Fund from the list above
- Complete KYC via Aadhaar, PAN, and mobile OTP
- Choose between SIP or lump sum
- Invest via trusted platforms like Zerodha, Groww, Kuvera
- Track and review annually
📌 Internal Link: Mutual Funds for Tax Saving in FY 2025–26
❓ Frequently Asked Questions (FAQs)
Q. Can I withdraw ELSS before 3 years?
❌ No, each investment has a 3-year lock-in.
Q. Are ELSS returns taxable?
✅ Yes, gains above ₹1 lakh/year are taxed at 10% (LTCG).
Q. Is ELSS risky?
⚠️ Moderately risky, since it invests in equities.
🔚 Final Thoughts – Should You Invest in ELSS in FY 2025–26?
If you want to save tax, build wealth, and invest for at least 3 years, ELSS is your best choice under 80C. It’s simple, flexible, and potentially rewarding.
❝ Investing in ELSS today can give you more than just tax benefits – it’s a step toward your financial freedom. ❞
🔗 Internal & External Links
- Mutual Fund Taxation Explained
- Crypto vs Mutual Funds – What Should a New Investor Choose?
- SEBI Mutual Fund Guide
- Value Research ELSS Fund Comparison
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