The best ELSS funds in India solve two financial problems simultaneously — saving up to ₹46,800 in income tax under Section 80C and building long-term equity wealth. No other 80C instrument does both as efficiently.
If you are ready to start your ELSS SIP today:
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If you want the complete honest comparison of the best ELSS funds in India first — read on. This guide covers what actually matters when choosing and which 5 funds to shortlist in 2026.
Why ELSS Is the Best 80C Investment — Honest Comparison
Before the best ELSS funds list — why ELSS beats every other 80C option:
| Instrument | Returns | Lock-in | Tax on Gains |
|---|---|---|---|
| ELSS | 10-15% historical | 3 years | 10% LTCG above ₹1L |
| PPF | 7.1% | 15 years | Tax-free |
| NSC | 7.7% | 5 years | Taxable |
| Tax-saving FD | 6.5-7% | 5 years | Fully taxable |
| ULIP | Variable | 5 years | Complex charges |
ELSS wins on two critical factors that matter most — highest potential returns and shortest lock-in among all 80C instruments.
The tax saving calculation:
Annual ELSS investment: ₹1,50,000
Tax slab 30%: Tax saved ₹46,800
Tax slab 20%: Tax saved ₹31,200
Tax slab 10%: Tax saved ₹15,600
Plus wealth building at 12-15% annual returns!
No other 80C option delivers this combination!
What Makes the Best ELSS Funds in India — 3 Factors
Choosing from the best ELSS funds in India shortlist requires understanding three factors that actually matter:
Factor 1 — Expense Ratio:
Lower expense ratio means more of your money compounds. The difference between a 1.20% and 0.65% expense ratio over 20 years on ₹1.5 lakh annually is approximately ₹10 lakhs in final corpus.
Factor 2 — Consistent Long-Term Returns:
Evaluate best ELSS funds in India on 5-year and 10-year CAGR — not last year’s flashy returns. One good year means nothing. Consistency across market cycles is everything.
Factor 3 — AUM Size:
Funds with AUM above ₹5,000 crore offer better liquidity and stability. Large AUM funds provide confidence that large institutional investors trust them too.
5 Best ELSS Funds in India 2026 — Complete Honest Review
1. Mirae Asset ELSS Tax Saver Fund — Best for Beginners
Among all the best ELSS funds in India — Mirae Asset stands out for beginners with its combination of the lowest expense ratio and largest AUM.
→ Expense ratio: ~0.55% (lowest in top-tier category)
→ AUM: ₹26,000+ crore (largest among best ELSS funds)
→ 5-year returns: ~13-14%
→ Large-cap focused portfolio
→ Consistent across market cycles
Best for: First-time ELSS investors wanting reliability over aggression.
2. Motilal Oswal ELSS Tax Saver Fund — Best Recent Performer
The highest 3-year returns among the best ELSS funds in India makes Motilal Oswal a compelling choice for growth-focused investors.
→ Expense ratio: 0.64%
→ AUM: ₹5,134 crore
→ 3-year returns: ~20% (highest in category)
→ Concentrated mid and small cap portfolio
Honest caveat: High concentration means higher volatility. Best for investors with 7+ year horizon comfortable with short-term swings.
Best for: Aggressive growth investors wanting maximum wealth creation alongside tax saving.
3. DSP ELSS Tax Saver Fund — Best Balanced Option
DSP consistently appears in this category lists for its balanced approach across market capitalisations.
→ Expense ratio: 0.91%
→ AUM: ₹16,666 crore
→ 3-year returns: ~12%
→ Well-diversified large and mid cap mix
→ Consistent across bull and bear markets
Best for: Investors wanting balanced exposure without extreme concentration risk.
4. Canara Robeco ELSS Tax Saver Fund — Best Low-Cost Consistent
Canara Robeco earns its place among the best ELSS funds in India through consistent quality-focused stock selection at low cost.
→ Expense ratio: 0.70%
→ AUM: ₹8,725 crore
→ 3-year returns: ~10%
→ Lower drawdowns during market corrections
→ Conservative quality portfolio
Best for: Risk-averse equity investors wanting stability with tax saving.
5. SBI ELSS Tax Saver Fund — Best Trusted Brand
SBI’s entry among this category is driven by its brand trust and largest AUM in the category — though its higher expense ratio deserves attention.
→ Expense ratio: 1.26%
→ AUM: ₹31,734 crore (largest overall)
→ 5-year returns: 14.8%
→ SBI brand institutional trust
Honest limitation: At 1.26% expense ratio — other best ELSS funds in India like Mirae Asset and Canara Robeco deliver similar returns at significantly lower cost.
Best for: Investors who prioritise SBI brand trust above cost efficiency.
Best ELSS Funds in India — Quick Comparison 2026
| Fund | Expense Ratio | AUM | 3Y Returns | Best For |
|---|---|---|---|---|
| Mirae Asset ELSS | ~0.55% | ₹26,000+ cr | ~11% | Beginners |
| Motilal Oswal ELSS | 0.64% | ₹5,134 cr | ~20% | Aggressive |
| DSP ELSS | 0.91% | ₹16,666 cr | ~12% | Balanced |
| Canara Robeco ELSS | 0.70% | ₹8,725 cr | ~10% | Conservative |
| SBI ELSS | 1.26% | ₹31,734 cr | ~12% | Trust seekers |
Returns approximate as of 2026. Past performance does not guarantee future results.
How Much to Invest in the Best ELSS Funds in India
Step 1: Check annual EPF contribution from salary slip
Step 2: 80C limit = ₹1,50,000/year
Step 3: Gap = ₹1,50,000 – EPF
Step 4: Invest gap in these ELSS funds via monthly SIP
Example:
EPF annual: ₹60,000
Remaining gap: ₹90,000
Monthly SIP: ₹7,500
Tax saved at 20% slab: ₹18,000/year!
SIP vs Lump Sum in ELSS
SIP: Monthly investment spreads across market cycles — buys more units when markets fall. Best for salaried investors. Start April — not March.
Lump sum: Suitable when you have idle cash. Higher risk due to market timing.
Building Dhan recommendation:
Start monthly SIP in April for the full financial year. ELSS funds deliver maximum benefit through disciplined monthly SIP — not last-minute March lump sums.
How to Start ELSS SIP in 3 Steps
Step 1 — Open investment account:
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Step 2 — Search chosen fund:
→ “Mirae Asset ELSS Tax Saver Direct Growth”
→ OR “Motilal Oswal ELSS Tax Saver Direct Growth”
→ Always select Direct Growth plan
Step 3 — Set monthly SIP:
→ Enter amount based on 80C gap
→ Select date — 1st or 5th of month
→ SIP is live!
ELSS Tax Treatment — Know Before You Invest
Lock-in: Each monthly SIP unit has its own 3-year lock-in from purchase date — not from when you started the SIP.
LTCG tax after 3 years:
Gains above ₹1 lakh/year: taxed at 10% LTCG
Example:
Total gains: ₹1,80,000
Exempt: ₹1,00,000
Taxable: ₹80,000
Tax: ₹8,000
Net gain: ₹1,72,000
Still far better than FD interest at slab rate!
5 Common ELSS Mistakes to Avoid
1 — Investing in Regular plan instead of Direct:
Regular plan costs 0.50-1% more annually — compounding into lakhs of rupees lost over time.
2 — Choosing based on last-year returns:
ELSS funds are evaluated on 5-10 year consistency — not last year’s chart-topper.
3 — Stopping SIP after 3 years:
These funds become most powerful as long-term equity investments — the 3-year lock-in is a minimum not a target.
4 — Last-minute March lump sum:
Market prices tend to be inflated during tax-saving rush season. Monthly SIP from April is significantly more efficient.
5 — Mixing insurance and investment:
As covered in ULIP India — Why to Avoid — ULIPs deliver worse outcomes than ELSS plus term insurance separately.
Start Your ELSS SIP This Month
The best ELSS funds in India are not the ones with the flashiest recent returns. They are funds with low expense ratios, consistent long-term performance, and large stable AUMs — like Mirae Asset ELSS for beginners or Motilal Oswal ELSS for growth-focused investors.
Start this month. Not March. Not next year.
👉 Open Angel One — Start Your ELSS SIP Today
And if you want the complete framework for building wealth as an Indian — download the free guide 7 Money Moves to Make Before You Turn 30 free when you subscribe to the Building Dhan newsletter at buildingdhan.in.
Disclosure: This post contains affiliate links. Mutual fund investments are subject to market risks — please read all scheme-related documents carefully. Past performance does not guarantee future results. This is not financial advice.
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