Top Mutual Funds Under 80C in India 2025
Explore Section 80C of the Income Tax Act for potential tax savings. ELSS mutual funds, a top investment choice, provide up to INR 1.5 lakh in tax deductions. While they yield profitable long-term returns, remember that ELSS mutual funds become taxable after 3 years.
To make informed investment decisions, delve into the details of these funds. Check out our guide on the best ELSS mutual funds 2025 to get started on maximising your savings.
List of Best Mutual Funds Under 80C in India 2025
Here is a list of mutual funds eligible for 80C deduction based on 1-year absolute returns available to investors in India for 2025.
| Fund Name | AUM (in Cr.) | CAGR 3Y (%) | Expense Ratio (%) | Absolute Returns - 1Y (%) | Alpha (%) |
|---|---|---|---|---|---|
| SBI LT Advantage Fund-V | 362.08 | 25.49 | 0.00 | 28.91 | 7.96 |
| Parag Parikh ELSS Tax Saver Fund | 5,084.67 | 22.61 | 0.61 | 16.71 | 5.13 |
| WOC ELSS Tax Saver Fund | 359.81 | 0.00 | 0.69 | 16.50 | 5.76 |
| HSBC Tax Saver Equity Fund | 235.25 | 23.50 | 1.60 | 15.83 | 5.43 |
| DSP ELSS Tax Saver Fund | 16,637.95 | 24.28 | 0.74 | 13.82 | 4.54 |
| Motilal Oswal ELSS Tax Saver Fund | 3,896.70 | 31.04 | 0.65 | 13.60 | 5.43 |
| HDFC ELSS Tax saver | 16,232.40 | 26.16 | 1.06 | 12.67 | 3.91 |
| PGIM India ELSS Tax Saver Fund | 763.97 | 17.98 | 0.73 | 12.37 | 4.01 |
| ICICI Pru ELSS Tax Saver Fund | 14,121.07 | 19.91 | 1.08 | 12.10 | 3.76 |
| LIC MF ELSS Tax Saver | 1,088.04 | 20.36 | 0.97 | 11.56 | 3.62 |
Disclaimer: Please note that the above table is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing. The data is derived from Tickertape Stock Screener and is subject to real-time updates.
Note: The data on the top mutual funds under 80C in India in the list is from 27th May 2025, and is derived from Tickertape Mutual Fund Screener.
🚀 Pro Tip: You can use Tickertape’s Stock Screener to research and evaluate stocks with over 200+ filters and parameters.
Top 10 Funds Under 80C: An Overview
SBI LT Advantage Fund-V
SBI Long Term Advantage Fund-V is an Equity Linked Savings Scheme (ELSS) offering tax deductions under Section 80C. The fund invests in a diversified portfolio of equity and equity-related instruments, aiming for long-term capital appreciation. It comes with a three-year lock-in, combining tax benefits with equity market growth.
Parag Parikh ELSS Tax Saver Fund
Parag Parikh ELSS Tax Saver Fund is an equity-linked savings scheme focused on long-term capital growth while offering tax benefits under Section 80C. The fund emphasises a value-investing approach, selecting quality businesses across market caps. It aims to provide tax-efficient returns while adhering to a three-year lock-in.
WOC ELSS Tax Saver Fund
WOC ELSS Tax Saver Fund seeks to deliver long-term capital growth with tax benefits under Section 80C. It invests in a mix of large-cap, mid-cap, and small-cap equities. The fund follows a bottom-up stock-picking strategy, offering diversification and tax efficiency with a mandatory three-year lock-in period.
HSBC Tax Saver Equity Fund
HSBC Tax Saver Equity Fund is an ELSS scheme providing tax benefits and aiming for long-term capital appreciation. The fund invests primarily in equity and equity-related instruments, selecting quality stocks across sectors and market caps. It combines tax savings with the potential of wealth creation over time.
DSP ELSS Tax Saver Fund
DSP ELSS Tax Saver Fund is a diversified equity-linked savings scheme that invests across market capitalisations. It offers tax deductions under Section 80C, while aiming for long-term capital appreciation. The fund follows a disciplined approach to stock selection, balancing growth potential with risk management and tax benefits.
Motilal Oswal ELSS Tax Saver Fund
Motilal Oswal ELSS Tax Saver Fund combines tax-saving benefits with long-term wealth creation. It follows a bottom-up investment approach, focusing on quality businesses with sustainable competitive advantages. The fund is designed for investors seeking tax efficiency and long-term growth through a three-year lock-in period.
HDFC ELSS Tax Saver
HDFC ELSS Tax Saver Fund invests in a diversified portfolio of equities across market caps, offering tax deductions under Section 80C. The fund focuses on long-term wealth creation while adhering to a three-year lock-in period. It employs rigorous stock selection aimed at delivering consistent performance.
PGIM India ELSS Tax Saver Fund
PGIM India ELSS Tax Saver Fund is an equity-linked savings scheme targeting long-term capital growth with tax benefits. It invests in a mix of large-cap, mid-cap, and small-cap stocks, aiming to capitalise on growth opportunities. The fund offers tax deductions under Section 80C, with a three-year lock-in.
ICICI Pru ELSS Tax Saver Fund
ICICI Pru ELSS Tax Saver Fund invests across market capitalisations, aiming for long-term capital appreciation with tax benefits. The fund focuses on companies with robust fundamentals and growth potential. It offers tax savings under Section 80C while maintaining a three-year lock-in period for investors.
LIC MF ELSS Tax Saver
LIC MF ELSS Tax Saver is an equity-linked savings scheme offering tax benefits under Section 80C. The fund invests in a diversified portfolio of equities, aiming to deliver long-term capital growth. With a three-year lock-in period, it combines tax savings with potential wealth creation.
How to Invest in Mutual Funds Under 80C?
You can easily invest in mutual funds under 80C by following these steps:
- To invest in mutual funds under 80C, you can visit an equity investment platform such as smallcase or Tickertape.
- The next step would be to research and identify the best mutual funds under 80C to invest in which aligns with your investment thesis. You can easily select and learn more about the best mutual funds under 80C 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 ELSS 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 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 Mutual Funds Under 80C?
The best 80C investment of the Income Tax Act provides an opportunity for taxpayers to reduce their tax liability significantly. By making eligible investments, individuals can claim tax 80c mutual fund deduction of upto Rs. 1.5 lakh as outlined in this section.
One attractive option for both salaried and self-employed individuals is the Equity Linked Savings Scheme Mutual Funds (ELSS). The best 80C funds not only provide a tax deduction but also offer the potential for wealth creation.
How Do Funds Under 80C Work?
Mutual funds under Section 80C of the Income Tax Act provide investors with a tax-efficient investment avenue. Section 80C mutual funds deductions can be done on their taxable income by investing in specified financial instruments, including certain mutual funds. Here’s a brief overview of how these funds operate within the 80C framework:
- Eligible Investments: Tax-saving ELSS funds encompass Equity-Linked Savings Schemes (ELSS). ELSS under 80c primarily invest in equities, offering the potential for capital appreciation.
- Lock-in Period: To avail of tax benefits under Section 80C, investors should note that ELSS funds come with a mandatory lock-in period of three years. During this period, investors cannot redeem or sell their units.
- Tax Benefits: Investment in mutual funds 80C qualify for a deduction of up to Rs 1.5 lakh from the investor’s taxable income under Section 80C. This deduction is subject to the overall limit prescribed by the section.
- Market-Linked Returns: Unlike traditional tax-saving instruments, ELSS tax-saving funds provide market-linked returns. The performance of the fund is directly influenced by the performance of the underlying equities.
Features of Mutual Funds Under Section 80C
Unlock the benefits of a ELSS Mutual Fund under 80C with these key features:
- Swift Access: A mere 3-year lock-in period, shorter than other sec 80C options.
- Tax Advantage: Qualify for a tax deduction of up to Rs. 1.5 lakh under Section 80C.
- Tax-Free Gains: Profits earned through ELSS Mutual Funds are exempt from taxation.
- Equity Earnings: Seize high earning potential by tapping into the equity markets.
- Tax-Efficient Withdrawals: Enjoy tax-exempt withdrawals from ELSS Mutual Funds.
- Dividend Potential: Opportunity for dividend earnings even during the lock-in period.
- Accessible Investment: Begin investing with as little as Rs. 500, sans any upper limit.
Factors to Consider Before Investing in Mutual Funds Under 80C
Here are a few factors to consider while investing in tax saver mutual funds under 80C:
ELSS Fund Asset Allocation
ELSS fund managers allocate a minimum of 80% of assets to equity and equity-related instruments, with flexibility for the remaining portion to be invested in fixed-income or money market instruments. Investment choices are tailored based on the fund’s objective and risk level, influencing the preference for small-cap or large-cap stocks.
Lock-in Period Advantage
ELSS funds, qualifying for tax benefits under Section 80C, feature a three-year lock-in period – the shortest compared to alternatives like PPF (15 years) and NSC (5 years). This lock-in facilitates compounded returns, making ELSS funds, with market-linked potential, a prudent inclusion in tax-saving portfolios.
SIP Approach for ELSS Investment
Employing a Systematic Investment Plan (SIP) in ELSS funds allows for regular, small investments, leveraging Rupee Cost Averaging. This minimises the average purchase cost and mitigates the risk of lump-sum investments during market peaks. Notably, the lock-in period applies to each SIP under 80C instalment, aligning with the investment date.
Strategic ELSS Fund Portfolio Management
Investors should exercise caution in adding multiple ELSS funds to their portfolio. Instead of solely focusing on tax benefits, investors need to consider the risk levels and other aspects of each scheme. Careful planning is crucial to avoid over-exposure and ensure a diversified ELSS fund portfolio.
Risk Levels in ELSS Funds
ELSS funds primarily engage in equity instruments, exposing them to stock-associated risks. However, it’s important to note that not all ELSS funds carry high risk. Fund managers offer varying risk levels to cater to diverse investor preferences.
Risks Involved While Investing in Mutual Funds Under 80C
ELSS stands out as a leading tax-saving product in today’s market. Yet, it’s crucial to be aware of associated risks. Let’s explore them:
Liquidity Risk
In the realm of mutual funds, liquidity risk arises when investors may face challenges redeeming their investments without a potential loss. Section 80C investment options often impose a 3-year lock-in period, restricting investors from redeeming or transferring their investments during this time. This lock-in period introduces liquidity risk, limiting investment decisions.
Market Risk
Investors may incur losses due to market downturns, driven by various factors like recession, politics, or market sentiment. Even high-return ELSS mutual funds, mandated to have at least 80% of their portfolio in equities, expose investors to market risk. The fund’s portfolio becomes susceptible to market fluctuations and downturns.
Performance Risk
Investors often choose 80C mutual funds list based on the belief in active and competent fund management. Performance risk arises when the fund manager’s decisions negatively impact the scheme’s portfolio, leading to potential losses for investors.
Higher Exposure to Equity
Unlike many tax-saving options in India that lean towards debt, the best mutual funds for tax saving present a diversified equity-oriented investment approach. Combining tax-saving and capital appreciation, ELSS is a favoured investment avenue. Despite offering high return potential compared to other tax-saving products, the equity exposure introduces risk due to the inherent volatility and market fluctuations associated with this asset class.
Benefits of Investing in Mutual Funds Under 80C
Here are a few of the benefits of investing in the top 80C mutual funds:
Tax Efficiency in Mutual Funds Under 80C
- Mutual funds eligible under 80C offer a tax deduction of up to ₹150,000 under Section 80C of the Income Tax Act for the current financial year.
- The unique feature of combining tax savings with potentially high returns distinguishes ELSS from other investment options.
Brief Lock-in Period in Mutual Funds Under 80C
- ELSS has the shortest lock-in period among tax-saving funds, at just 3 years, compared to 5 or more years for alternatives like PPF or Fixed Deposits.
- This shorter lock-in period facilitates higher returns for investors.
Favourable Tax Rates on Gains for Mutual Funds Under 80C
- 80C mutual fund investments require a minimum 3-year investment period, leading to long-term gains.
- Gains exceeding ₹1,00,000 are taxed at a lower rate of 10%, contrasting with the 15% tax on short-term capital gains.
Compounding Benefits in Mutual Funds Under 80C
- ELSS, with its 3-year lock-in, encourages disciplined, long-term investment and harnesses the power of compounding.
- The recommended investment horizon of 5-10 years helps investors capitalise on compounding for sustained growth.
Flexibility in Redemption in Mutual Funds Under 80C
- Investors are not compelled to redeem their ELSS funds after 3 years; continuation is an option.
- No maximum investment duration provides flexibility for investors satisfied with the fund’s performance.
Higher Returns Through Equity in Mutual Funds Under 80C
- Section 80C tax saving funds investing in equities, typically yield returns in the range of 15-20%, outperforming other tax-saving options.
- Over a 3-year span, compounding and equity returns contribute to the superior performance of ELSS.
SIP Convenience for Mutual Funds Under 80C
- Top-performing tax-saving funds offer the convenience of Systematic Investment Plans (SIP), allowing investors to contribute fixed amounts at regular intervals.
- This feature caters to the needs of the salaried class, enabling systematic monthly investments.
Safety and Transparency in Mutual Funds Under 80C
- Mutual fund investments, including ELSS, adhere to SEBI regulations, ensuring transparency.
- All mutual fund companies are required to make necessary disclosures, providing investors with a secure and transparent investment avenue.
How to Choose the Best Mutual Funds Under 80C for Investing?
Investing in mutual funds under Section 80C can be a tax-efficient strategy, but navigating the options requires careful consideration. Here’s a guide on how to choose the best mutual funds under Section 80C without explicit recommendations:
- Risk Assessment: Begin by assessing your risk tolerance. Section 80C mutual funds list come with varying levels of risk, from equity to debt. Choose funds aligned with your comfort level and financial goals.
- Historical Performance: Evaluate the historical performance of the best 80C funds India. While past performance doesn’t guarantee future results, it provides insights into a fund’s consistency and management strategy.
- Expense Ratios: Keep an eye on expense ratios. Lower expense ratios indicate a more cost-effective fund, allowing you to retain a higher share of returns.
- Portfolio Composition: Analyze the portfolio composition. Diversification is key; a well-balanced mix of assets can mitigate risk.
- Fund Manager Expertise: Research the fund manager’s track record. A skilled and experienced fund manager can significantly impact the fund’s performance.
- Tax Implications: Understand the tax implications of the fund. ELSS funds offer tax deductions under Section 80C, but it’s crucial to be aware of the associated lock-in period.
Taxation of Mutual Funds Under Section 80C as per the Union Budget 2024
Section 80C mutual funds or ELSS funds are equity funds that are taxed accordingly . Being aware of these tax implications is essential for making informed financial decisions. The Union Budget for 2024-25 has made significant changes to the taxation on equity mutual funds. Here we have listed these changes, along with the revised tax rates for equity mutual funds:
Short-Term Capital Gains Tax
Any gains made when holding equity mutual funds for less than 12 months are considered short-term capital gains. The Union Budget 2024-25 increased the tax rate on these gains to 20%. The STCG tax rate was previously 15%.
Long-Term Capital Gains Tax
For equity mutual funds held for over a year, gains are classified as long-term capital gains. The new budget introduces these key changes:
- Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
- Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
- Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.
Indexation was a method that allowed investors to adjust the purchase price of assets for inflation. This adjustment reduced taxable profits when selling assets like property or gold. Previously, these long-term capital gains were taxed at 20%. The new rule imposes a flat 12.5% tax on all long-term capital gains but eliminates any indexation benefits.
| 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% |
To Wrap It Up…
As the financial year unfolds, making the most of your tax-saving opportunities is more important than ever. Mutual funds for income tax exemption, especially ELSS schemes, strike a balance between tax benefits and long-term growth potential. By understanding how these funds work and keeping an eye on the evolving tax landscape, you can make decisions that align with your financial goals. Always take time to review the fund details, performance, and management before you invest, so you can approach the new financial year with confidence.
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 (FAQs) on Mutual Funds Under 80C
The minimum lock-in period for ELSS funds under Section 80C is 3 years, but many investors hold these funds longer to potentially benefit from compounding. The choice of duration depends on individual financial goals, risk tolerance, and market conditions. ELSS offers both tax savings and long-term growth potential.
Mutual funds eligible under Section 80C typically invest in a diversified portfolio of assets, including equities and/or debt instruments. These funds, such as Equity-Linked Savings Schemes (ELSS), allocate their investments strategically to achieve a balance between potential returns and risk.
Mutual funds under 80C do not guarantee specific returns as they are subject to market fluctuations. Returns depend on the performance of the underlying assets in the fund portfolio.
The timing of investments in mutual funds under Section 80C or tax-saving mutual funds for long-term depends on individual tax planning needs and financial goals. Many investors align contributions with the financial year to maximise tax benefits. Market conditions, income stability, and investment horizon can also influence the decision on when to invest.
The lock-in period for mutual funds under Section 80C is typically three years. During this time, investors cannot redeem or sell their units of the 80C funds with high returns, ensuring adherence to the regulatory requirements for tax benefits under Section 80C.
