List of Top Performing ELSS Mutual Funds in India for 2025
Equity Linked Savings Schemes (ELSS) are a unique category of mutual funds that combine tax efficiency with equity market participation. Designed to encourage long-term investing, they offer a structured approach to wealth creation while providing ELSS funds tax benefits. This blog provides a comprehensive overview of these aspects to enhance your understanding of ELSS fund investments.
List of Best ELSS Funds in 2025
Here is an educational list of the top ELSS funds 2025 in India based on their 5-yr CAGR:
| Fund Name | Fund Size (Rs. in cr.) | CAGR 5Y (%) |
|---|---|---|
| SBI ELSS Tax Saver Fund | 29,937.40 | 26.13 |
| Mirae Asset ELSS Tax Saver Fund | 26,075.63 | 22.49 |
| DSP ELSS Tax Saver Fund | 16,980.66 | 24.40 |
| HDFC ELSS Tax saver | 16,579.03 | 25.91 |
| Nippon India ELSS Tax Saver Fund | 15,338.90 | 23.90 |
| ICICI Pru ELSS Tax Saver Fund | 14,345.55 | 21.76 |
| Franklin India ELSS Tax Saver Fund | 6,705.56 | 24.57 |
| Kotak ELSS Tax Saver Fund | 6,354.72 | 22.84 |
| Parag Parikh ELSS Tax Saver Fund | 5,538.01 | 23.60 |
| Motilal Oswal ELSS Tax Saver Fund | 4,401.97 | 26.85 |
Note: The list of ELSS mutual funds in India is from 8th September 2025, and the data is derived from Tickertape Mutual Fund Screener, using the following filters:
- Category: Equity Linked Savings Schemes (ELSS)
- Plan: Growth
- CAGR 5Y: Sorted from Highest to Lowest
Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate funds with over 50+ pre-loaded filters and parameters.
Top ELSS Funds: An Overview
SBI ELSS Tax Saver Fund
SBI ELSS Tax Saver Fund is an equity-linked savings scheme that invests primarily in diversified equity portfolios across sectors and market capitalisations. It offers tax deductions under Section 80C and follows a 3 yr lock-in period, aiming for long-term wealth creation while providing tax benefits.
Mirae Asset ELSS Tax Saver Fund
Mirae Asset ELSS Tax Saver Fund diversified equity-linked savings scheme focusing on companies with strong fundamentals and growth potential. It combines tax-saving benefits under Section 80C with long-term capital appreciation opportunities. The fund invests across large, mid, and small-cap stocks and has a mandatory 3 yr lock-in.
DSP ELSS Tax Saver Fund
DSP ELSS Tax Saver Fund is an equity-linked savings scheme investing in a diversified equity portfolio across sectors. It aims to generate long-term capital growth while providing tax benefits under Section 80C.
HDFC ELSS Tax Saver Fund
The HDFC ELSS Tax Saver Fund is an ELSS scheme investing across large-cap, mid-cap, and small-cap companies with a focus on long-term value creation. It offers tax deductions under Section 80C and has a 3 yr lock-in period.
Nippon India ELSS Tax Saver Fund
Nippon India ELSS Tax Saver Fund is a tax-saving mutual fund that invests in equity and equity-related instruments across sectors. It seeks to achieve long-term capital appreciation while offering Section 80C tax benefits. The fund follows a 3 yr lock-in and maintains a diversified investment approach.
ICICI Pru ELSS Tax Saver Fund
The ICICI Pru ELSS Tax Saver Fund n ELSS scheme that invests across market capitalisations and sectors to generate long-term capital growth. It offers tax savings under Section 80C and comes with a 3 yr lock-in period, combining equity growth potential with tax efficiency.
Franklin India ELSS Tax Saver Fund
Franklin India ELSS Tax Saver Fund is a diversified equity-linked savings scheme focused on identifying fundamentally strong businesses. It aims to deliver long-term capital appreciation alongside tax-saving benefits under Section 80C. The fund invests across large, mid, and small-cap stocks and has a 3 yr lock-in.
Kotak ELSS Tax Saver Fund
Kotak ELSS Tax Saver Fund is an equity-linked savings scheme investing primarily in equities and related instruments across sectors. It seeks long-term wealth creation while offering tax deductions under Section 80C. The fund has a 3 yr lock-in and follows a bottom-up stock-picking strategy.
Parag Parikh ELSS Tax Saver Fund
Parag Parikh ELSS Tax Saver Fund is an ELSS fund with a value-oriented investment approach, focusing on quality businesses trading at reasonable valuations. It offers tax benefits under Section 80C and invests across market segments and sectors, with a mandatory 3 yr lock-in period.
Motilal Oswal ELSS Tax Saver Fund
Motilal Oswal ELSS Tax Saver Fund is an equity-linked savings scheme following a focused investing strategy by selecting high-conviction stocks. It aims to provide long-term wealth creation alongside tax savings under Section 80C. The portfolio typically invests in 25–30 carefully selected companies with a 3 yr lock-in.
What are ELSS Funds?
An ELSS fund allocates a minimum of 65% to equities and equity-linked instruments, complemented by a limited exposure to fixed-income securities. It has a mandatory three-year lock-in period. It stands as the sole mutual fund category qualifying for tax deductions under Section 80C of the Income Tax Act, 1961. This offers an opportunity to claim a tax rebate of up to Rs. 1,50,000, potentially saving Rs. 46,800 annually.
How to Invest in ELSS Funds in India?
You can easily invest in ELSS mutual funds by following these steps:
- To invest in high-return ELSS funds 2025, you can visit an equity investment platform such as smallcase or Tickertape.
- The next step would be to research and identify the top 5 ELSS funds which aligns with your investment thesis. You can easily select and learn more about the best tax saving mutual funds with the help of a financial tool like the Tickertape Mutual Fund Screener. With 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights about the fund’s performance. Try it now!
- Once you have selected the best funds based on different metrics and parameters, go to smallcase.com or the smallcase app, and login via your phone number. Click on ‘Discover‘ and enter the name of the specific mutual fund name in the search bar and hit enter. You can click on ‘invest now’ and select whether you want to invest a lump sum amount or start a SIP and start investing!
However, if you’re confused about which stocks to pick, you can explore smallcases:
- smallcases are readymade model portfolios of stocks/ETFs, that are based on a theme idea or strategy
- They’re created and managed by SEBI-registered investment experts (also known as smallcase managers)
- smallcase offers over 500+ stock portfolios, created by 200+ managers
Here are a few popular smallcases among new investors:
Disclosures for aforementioned smallcases
What are ELSS Funds?
An ELSS fund allocates a minimum of 65% to equities and equity-linked instruments, complemented by a limited exposure to fixed-income securities. It has a mandatory three-year lock-in period. It stands as the sole mutual fund category qualifying for tax deductions under Section 80C of the Income Tax Act, 1961. This offers an opportunity to claim a tax rebate of up to Rs. 1,50,000, potentially saving Rs. 46,800 annually.
Features of the ELSS Funds
Here are a few key features of the best ELSS Funds
- Tax Efficiency and Wealth Growth: Under Section 80C of the Act, ELSS investments present an attractive tax benefit of up to 1.5 lakh. Beyond the ELSS tax-saving benefits, these funds empowers you to strategically manage your taxable income through eligible deductions, paving the way for enhanced ELSS mutual fund returns.
- Flexible Investment Paths: ELSS funds offer the freedom to choose between lumpsum or a Systematic Investment Plan (SIP). Opting for SIP not only enables rupee cost averaging but also eliminates the burden of a hefty lumpsum investment, making it a lighter load on your financial journey.
- Professional Management for Optimal Growth: Entrust your investments to seasoned professionals navigating market dynamics and ELSS fund performance trackers. Fund managers, well-versed in market fluctuations, expertly oversee the money invested in ELSS, ensuring a robust and strategic approach to wealth management.
Who Can Consider Exploring ELSS Funds?
- Tax-saving investors: Those looking to claim deductions under Section 80C of the Income Tax Act, up to ₹1.5 lakh per year.
- First-time equity investors: ELSS for long-term wealth creation offer an entry point into equity markets with a 3 yr lock-in, encouraging disciplined investing.
- Long-term wealth builders: Investors with a time horizon of five years or more can benefit from equity-driven growth while also enjoying tax benefits.
- Salaried professionals and business owners: Especially those in higher tax brackets, as ELSS combines tax planning with potential capital appreciation.
- Goal-based investors: Ideal for those planning for long-term financial goals like retirement, child’s education, or wealth accumulation.
Risks Involved While Investing in the Best ELSS Funds
Navigating the landscape of ELSS funds requires a keen understanding of associated risks. Let’s delve into these potential pitfalls:
- Liquidity Risk: This risk revolves around the possibility of investors being unable to redeem their investments without incurring a loss in value. This constraint is primarily due to the three-year lock-in period, during which an investor cannot readily redeem or transfer their ELSS investment.
- Market Risk: This risk stems from the likelihood of investors experiencing losses due to unfavorable market conditions. The stock market’s performance is influenced by various factors such as economic recessions, political considerations, and overall market sentiment.
- Equity Exposure Risk: ELSS investment options are mandated to allocate a minimum of 80% of their assets to equity securities. This statutory requirement exposes the ELSS fund’s portfolio to inherent market risks. As equity markets fluctuate, the fund’s performance is intricately tied to these market movements.
Benefits of Investing in the Best ELSS Funds
Here are the advantages of investing in the best ELSS funds:
- Shorter Lock-In Period for Greater Liquidity: Investing in the best ELSS funds, including ELSS SIP plans, provides a distinct advantage with a mere 3-year lock-in period, making it the most liquid option among tax-saving investments. This stands in stark contrast to alternatives like the Public Provident Fund (PPF), which imposes a significantly longer 15-year maturity period.
- Potential Returns Through Stock Investments: Unlike traditional tax-saving options such as bank fixed deposits and PPF, ELSS equity tax saver funds stand out by investing in a diversified portfolio of stocks from various companies. The net asset value (NAV) of ELSS funds fluctuates in tandem with market movements, offering investors the potential for substantial returns. However, one must keep in mind that returns are not guaranteed.
- Tax Deductions for Investments up to Rs.1.5 Lakh: Investors can leverage the ELSS tax benefits under the provisions of the Income Tax Act by allocating funds to ELSS. With eligible investments capped at Rs.1.5 lakh, individuals can optimise their tax liabilities while fostering wealth creation through strategic mutual fund investments.
Taxability on the Best ELSS Funds
Short-Term Capital Gains (STCG)
If you hold equity mutual funds for less than a year, the gains from these investments are classified as short-term capital gains. According to the new budget, these gains are now taxed at a rate of 20%, which has been increased from the previous rate of 15%.
Long-Term Capital Gains (LTCG)
For equity mutual funds held for more than a year, the gains are considered long-term capital gains. The key points to note under the new budget are:
- Tax-Free Limit: Gains up to Rs. 1.25 lakh in a financial year remain tax-free. This limit has been increased from the previous threshold of Rs. 1 lakh.
- Tax Rate: Any gains above Rs. 1.25 lakh are taxed at a flat rate of 12.5%. It was previously taxed at 10%.
- Indexation: It’s important to note that the benefit of indexation, which previously allowed investors to adjust the purchase price of their assets for inflation, has been removed for all asset classes, including equity mutual funds.
| Capital Gains Tax | Holding Period | Old Rate | New Rate |
| Short-Term Capital Gains (STCG) | Less than 12 months | 15% | 20% |
| Long-Term Capital Gains (LTCG) | More than 12 months | 10% | 12.50% |
No Indexation Benefit: This change affects the overall tax liability, potentially increasing it for long-term investors.
Factors to Consider Before Investing in the Best ELSS Funds
Consider the following key factors when selecting the most suitable ELSS funds:
- Lock-In Period Significance: ELSS funds impose a mandatory three-year lock-in period, restricting the redemption of investments before this duration. Investors must carefully evaluate their commitment to this time frame, as premature withdrawals are not permitted.
- Performance-Dependent Returns: It’s essential to recognise that ELSS funds do not guarantee returns. Instead, their performance is intricately tied to the success of the underlying securities.
- Extended Investment Horizon for Optimal Returns: To maximise returns, ELSS funds require a longer investment horizon, preferably exceeding five years. This extended commitment helps mitigate market volatility, especially considering the inherent exposure to equities within ELSS funds.
To Wrap It Up…
To conclude, navigating the landscape of the best ELSS funds is essential for informed investment decisions. This exploration has shed light on critical factors, including features, benefits, risk management, and expense ratios. Investors should prioritise aligning these aspects with their financial goals. Regular reviews and staying attuned to market dynamics are crucial for optimising ELSS funds’ portfolios.
Considering a Loan Against Mutual Funds (LAMF)? Explore LAMF on smallcase –
smallcase now offers loans against mutual funds! Although borrowers cannot take loans against funds with a lock-in period yet, they can take loans against any other funds that are not held in demat form or funds held through Zerodha demat accounts. Explore all about the eligibility criteria, documents required, features, and benefits of a loan against mutual funds on smallcase through the articles mentioned below:
Frequently Asked Questions About ELSS Funds
The duration of investment in ELSS mutual funds depends on individual financial goals, risk tolerance, and market conditions. While they have a mandatory 3 yr lock-in, many investors hold them longer for potential growth.
The best performing elss mutual funds typically invest in a diversified portfolio that includes equity instruments, such as stocks, and occasionally equity-related securities.
The returns on ELSS mutual funds vary and are subject to market conditions and fund performance. These funds aim to provide long-term capital appreciation with the added benefit of tax savings.
Investors must hold ELSS funds for a minimum of 3 years from the investment date.
Distinguishing tax-saving mutual funds from ELSS, the former is obligatory for income tax, while the latter is a choice for long-term financial planning.
