Top ELSS Funds for Tax Saving in FY 2025-26
💡 What is ELSS and Why Choose It for Tax Saving?
Equity Linked Savings Scheme (ELSS) is a type of mutual fund that offers tax benefits under Section 80C of the Income Tax Act. ELSS funds have the shortest lock-in (3 years) among all tax-saving options and provide the potential for high long-term returns. In FY 2025-26, ELSS remains the most popular tax-saving investment for Indian investors seeking both growth and tax efficiency.
🏆 Top ELSS Funds for FY 2025-26
Mirae Asset Tax Saver Fund
Overview: Mirae Asset Tax Saver Fund is known for its consistent performance, low expense ratio, and diversified portfolio. The fund invests in a mix of large, mid, and small cap stocks, aiming for long-term capital appreciation.
- 3Y CAGR: 20.1% 5Y CAGR: 17.3% 10Y CAGR: N/A
- AUM: ₹15,000 Cr
- Expense Ratio: 0.60%
- Fund Manager: Siddharth Srivastava (since 2016)
- Portfolio Highlights: Top holdings include HDFC Bank, ICICI Bank, Infosys, and Axis Bank. Diversified across Financials, IT, and Consumer sectors.
- Awards: Morningstar 5-Star Rated (2024)
Who Should Invest: Investors seeking tax savings, long-term growth, and a diversified portfolio. Suitable for SIP and lump sum investments.
Why We Like It: Consistent outperformance, low costs, and a strong risk management framework.
Risks: Market-linked returns, subject to volatility. Lock-in period of 3 years.
Axis Long Term Equity Fund
Overview: Axis Long Term Equity Fund is a popular ELSS fund with a focus on quality large-cap stocks. The fund aims to deliver stable returns with lower risk and is managed by an experienced team.
- 3Y CAGR: 15.8% 5Y CAGR: 13.2% 10Y CAGR: 12.7%
- AUM: ₹32,000 Cr
- Expense Ratio: 0.72%
- Fund Manager: Jinesh Gopani (since 2011)
- Portfolio Highlights: Top holdings include Bajaj Finance, HDFC Bank, and Kotak Mahindra Bank. Focus on Financials and Consumer sectors.
- Awards: CRISIL Fund Rank 1 (2024)
Who Should Invest: Conservative investors looking for tax savings and stable long-term growth.
Why We Like It: Quality stock selection, experienced management, and a strong track record.
Risks: May underperform in bull markets due to quality bias. Lock-in period of 3 years.
Quant Tax Plan
Overview: Quant Tax Plan is an aggressive ELSS fund known for its tactical allocation and high conviction bets. The fund has delivered strong returns in recent years and is best suited for high risk takers.
- 3Y CAGR: 28.4% 5Y CAGR: 22.1% 10Y CAGR: N/A
- AUM: ₹3,200 Cr
- Expense Ratio: 0.78%
- Fund Manager: Sanjeev Sharma (since 2018)
- Portfolio Highlights: High sector rotation, focus on momentum stocks. Top holdings include JBM Auto, ITC, and Reliance Industries.
- Awards: Outlook Money Best ELSS Fund (2024)
Who Should Invest: Aggressive investors seeking high returns and willing to accept higher volatility and risk.
Why We Like It: Tactical allocation, high returns, and a dynamic management style.
Risks: High volatility, rapid sector rotation can lead to underperformance in sideways markets. Lock-in period of 3 years.
📋 How to Choose the Best ELSS Fund
- Check 5Y/10Y Returns: Consistency is key for long-term wealth creation.
- Expense Ratio: Lower costs mean higher net returns.
- Fund Manager Track Record: Experience and stability matter.
- Portfolio Diversification: Prefer funds with a balanced sector allocation.
🗣️ FAQs on ELSS Funds
How much can I save in tax with ELSS?
Can I withdraw before 3 years?
Is SIP better than lump sum in ELSS?
🔚 Conclusion
ELSS funds are the best way to save tax and build wealth in FY 2025-26. Choose a fund that matches your risk profile, stay invested for the long term, and review performance annually.