Investors looking to save tax under Section 80C often consider ELSS mutual funds due to their potential to generate higher returns compared to traditional tax-saving options like PPF, NSC, or tax saver fixed deposits. With equity exposure and a short lock-in period of just 3 years, ELSS funds have become one of the most preferred tax-saving investments.
In this article, we analyze the most consistent ELSS mutual funds for tax saving in 2026 based on 3-year, 5-year, and 10-year returns.
If you are looking for high return high risk fund, check Top 5 Small-Cap Mutual Funds to invest based on rolling returns.
What are ELSS Mutual Funds and How Do They Help Save Tax?
Equity Linked Savings Scheme (ELSS) mutual funds are diversified equity mutual funds that qualify for tax deduction under Section 80C of the Income Tax Act. Investors can claim deduction up to ₹1.5 lakh per financial year.
Key features:
- Tax deduction under Section 80C
- Shortest lock-in period of 3 years
- Potential for higher long-term returns
- SIP and lump sum investment options
- Equity market linked returns
Why ELSS is the Best Tax Saving Option Under Section 80C in 2026
Here is why ELSS funds stand out among tax-saving investments:
- Only 3-year lock-in compared to 15 years in PPF
- No upper limit on returns
- SIP option helps reduce market timing risk
- Long-term wealth creation potential
- Tax-efficient investment option
For investors looking to combine tax saving + wealth creation, ELSS funds remain one of the best options in 2026.
Best ELSS Mutual Funds for Tax Saving in 2026 (Top Picks)
Based on consistency across 3-year, 5-year, and 10-year returns, here are the top 5 ELSS mutual funds:
- Motilal Oswal ELSS Tax Saver Fund – Direct Plan
- SBI ELSS Tax Saver Fund – Direct Plan
- HDFC ELSS Tax Saver Fund – Direct Plan
- DSP ELSS Tax Saver Fund – Direct Plan
- JM ELSS Tax Saver Fund – Direct Plan
These funds have delivered stable performance across multiple market cycles.
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ELSS Funds – 3 Year, 5 Year and 10 Year Returns Comparison
| Fund Name | 3 Yr Return (%) | 5 Yr Return (%) | 10 Yr Return (%) |
|---|---|---|---|
| Motilal Oswal ELSS Tax Saver Fund | 25.42 | 19.47 | 18.57 |
| SBI ELSS Tax Saver Fund | 22.05 | 18.81 | 15.77 |
| HDFC ELSS Tax Saver Fund | 19.51 | 18.82 | 15.34 |
| DSP ELSS Tax Saver Fund | 19.61 | 16.35 | 17.00 |
| JM ELSS Tax Saver Fund | 18.82 | 15.53 | 17.07 |
Top ELSS Funds Based on Consistent Performance
1) Motilal Oswal ELSS Tax Saver Fund
This fund has delivered strong performance across short, medium, and long-term periods. The fund follows a focused portfolio strategy and has delivered superior returns over the last 10 years.
Why invest?
- Highest 3-year returns among peers
- Strong 5-year performance
- Excellent long-term track record
2) SBI ELSS Tax Saver Fund
SBI ELSS is one of the oldest tax saving funds with consistent long-term performance. The fund follows a diversified approach across market caps.
Why invest?
- Stable performance across cycles
- Strong fund management
- Reliable long-term returns
3) HDFC ELSS Tax Saver Fund
HDFC ELSS Tax Saver Fund has shown improved performance in recent years and delivered consistent 5-year returns.
Why invest?
- Strong 5-year performance
- Large-cap oriented stability
- Suitable for conservative investors
4) DSP ELSS Tax Saver Fund
DSP ELSS fund has delivered stable returns with lower volatility compared to aggressive ELSS funds.
Why invest?
- Consistent 10-year performance
- Balanced portfolio strategy
- Good risk-adjusted returns
5) JM ELSS Tax Saver Fund
JM ELSS is a lesser-known but consistent performer with stable long-term returns.
Why invest?
- Consistent long-term returns
- Balanced risk profile
- Strong 10-year performance
ELSS vs PPF vs Tax Saver FD – Which is Better in 2026?
| Investment | Lock-in | Returns | Tax Benefit |
|---|---|---|---|
| ELSS | 3 Years | Market Linked | 80C |
| PPF | 15 Years | Fixed | 80C |
| Tax Saver FD | 5 Years | Fixed | 80C |
ELSS funds are suitable for investors who want higher returns and shorter lock-in.
Who Should Invest in ELSS Mutual Funds?
ELSS funds are suitable for:
- Salaried individuals looking to save tax
- First-time mutual fund investors
- Long-term wealth creators
- Investors with moderate to high risk appetite
- Investors preferring SIP investments
Risks to Consider Before Investing in ELSS Funds
Investors should consider the following risks:
- Market volatility risk
- Mandatory 3-year lock-in
- Equity market fluctuations
- No guaranteed returns
However, long-term investors can benefit from compounding and market growth.
Explore – 58% Returns in 2023, Just 9% in 2025 – The Brutal Truth About Chasing Top Large Cap Mutual Funds.
How to Invest in ELSS Mutual Funds
You can invest in ELSS funds through:
- Direct mutual fund websites
- Mutual fund apps like ET money, Groww, Kuvera etc.
- Several online investment platforms
- Through SIP or lump sum
SIP investing is generally preferred to average market volatility.
Final Thoughts – Best ELSS Funds for Tax Saving in 2026
ELSS mutual funds continue to remain one of the best tax saving investments under Section 80C. Among the available options, Motilal Oswal ELSS, SBI ELSS, HDFC ELSS, DSP ELSS, and JM ELSS stand out due to their consistent performance across 3-year, 5-year, and 10-year periods.
Investors should choose ELSS funds based on risk appetite, investment horizon, and portfolio diversification. Investing through SIP and staying invested for long term can help generate superior returns while saving tax.
Note: Mutual fund investments are subject to market risks. Past performance does not guarantee future returns.
