Top Tax-Saving Mutual Funds and ELSS Options to Consider in April 2026
Best tax saving mutual funds or ELSS to invest in April 2026
The Economic Times
Image: The Economic Times
As the financial year-end approaches, taxpayers in India are encouraged to invest in tax-saving mutual funds or Equity Linked Savings Schemes (ELSS) under Section 80C of the Income Tax Act. With a maximum investment limit of ₹1.5 lakh (approximately $1,800 USD), these funds offer potential long-term returns and a shorter lock-in period compared to traditional savings options.
- 01Investors can claim tax deductions up to ₹1.5 lakh under Section 80C of the Income Tax Act.
- 02ELSS funds have a lock-in period of three years, shorter than many other tax-saving investments.
- 03The average return for ELSS funds over ten years is approximately 13.61%.
- 04Recommended ELSS funds include Canara Robeco, Mirae Asset, and Invesco India.
- 05Investors should have a long-term horizon of five to seven years for equity mutual funds.
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As the end of the financial year approaches in India, many taxpayers are looking to optimize their tax savings through investments in tax-saving mutual funds or Equity Linked Savings Schemes (ELSS) under Section 80C of the Income Tax Act. This section allows for tax deductions of up to ₹1.5 lakh (approximately $1,800 USD) per financial year on specified investments. ELSS funds, which invest primarily in stocks, have the potential for higher returns over the long term, averaging around 13.61% over the past decade. They also offer a shorter lock-in period of three years, making them more accessible compared to other options like the Public Provident Fund (PPF) or National Savings Certificate (NSC), which have longer lock-in durations. Recommended funds for April 2026 include Canara Robeco ELSS Tax Saver Fund, Mirae Asset ELSS Tax Saver Fund, and Invesco India ELSS Tax Saver Fund. Investors are advised to approach equity investments with a long-term perspective, ideally a horizon of five to seven years, to effectively manage market volatility and capitalize on potential returns.
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Investing in ELSS can significantly reduce your taxable income, potentially saving you a considerable amount in taxes. This is particularly beneficial for middle-class taxpayers looking to maximize their savings.
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