Tax rush before March 2026 boosts ELSS demand; spotlight on best-performing tax saver funds

As the financial year draws to a close, millions of taxpayers are entering the annual January–March scramble to make last-minute tax-saving investments. Section 80C of the Income Tax Act, which allows a deduction of up to Rs 1.5 lakh, remains the most widely used route—and within it, Equity Linked Savings Schemes (ELSS) are emerging as a preferred choice for investors looking to balance tax saving with long-term wealth creation.

ELSS funds, which invest primarily in equities, offer the shortest lock-in period of three years among all 80C-eligible instruments. But this advantage comes with market-linked risk. Unlike the Public Provident Fund (PPF) or National Savings Certificate (NSC), ELSS funds do not guarantee returns and may witness losses during volatile periods. Even so, they have delivered impressive long-term performance: the ELSS category has averaged around 16% annual returns over 10 years, making it one of the strongest compounding engines for patient investors.

SBI ELSS Tax Saver Fund

Among the 80C offerings, the SBI ELSS Tax Saver Fund – Regular Plan stands out due to its scale, history and performance. Launched in March 1993, it is one of India’s oldest ELSS schemes and, with ₹31,783 crore in assets (as of November 28, 2025), also one of the largest.

Its long-term track record shows both resilience and cyclical volatility, characteristics typical of equity markets. Over the past decade, annual returns have fluctuated from -– 8.29% in 2018 to a stellar 39.99% in 2023, when it ranked No.1 among 35 ELSS funds.

Recent returns include:

27.75% in 2024, well above category averages

6.02% in 2025, slightly below benchmark but stable

39.99% in 2023, a standout year

The fund’s Sharpe ratio of 1.21 indicates superior risk-adjusted performance, while its beta of 0.95 shows slightly lower volatility than the broader market.

Strategically, the fund invests over 80% in equities, following a growth-oriented, blended approach. Its portfolio spans 72 stocks, tilted toward large caps with an average market cap of ₹1.73 lakh crore. Top holdings such as HDFC Bank, Reliance Industries, Tata Steel, ICICI Bank and Cipla anchor it in stable, sector-leading companies. Financials (28.8%), energy (13.4%), technology (12%) and materials (11.7%) form its core sector exposure.

How other ELSS funds stack up

A comparison of five major ELSS schemes—Bandhan, DSP, Franklin India, HDFC and ITI—reveals distinct performance patterns.

Short-term returns (one week to six months) remain modest, reflecting market consolidation. DSP leads near-term charts with 2.29% in one month and 7.63% over three months, indicating stronger short-term momentum.

One-year performance is dominated by HDFC ELSS at 9.78%, far ahead of Franklin India (3.84%) and ITI ELSS (4.29%).

Over longer horizons:

3-year leaders: ITI (21.29%), HDFC (20.82%), DSP (19.99%)

5-year leaders: HDFC (24.40%), followed closely by SBI (24.25%)

10-year leaders: DSP (17.27%), Bandhan (16.58%)

SIP returns echo these trends—HDFC continues to top 3-year and 5-year SIP charts at 19.92% and 21.20%, reinforcing its consistency for long-horizon investors.

Latest category leaders across timeframes

1-Month Top Performers

DSP ELSS Tax Saver Fund – 2.29%

Bandhan ELSS – 1.81%

WhiteOak Capital ELSS – 1.74%

6-Month Top Performers

JM ELSS – 8.98%

WhiteOak Capital ELSS – 6.88%

Bandhan ELSS – 6.71%

1-Year Top Performers

HDFC ELSS – 9.78%

Bandhan ELSS – 7.38%

WhiteOak Capital – 7.20%

3-Year Top Performers

Motilal Oswal ELSS – 24.29%

SBI ELSS – 23.48%

WhiteOak Capital – 22.04%

5-Year Top Performers

HDFC ELSS – 24.40%

SBI ELSS – 24.25%

Motilal Oswal – 23.78%

What investors should note

For investors seeking stability and consistency, HDFC ELSS remains one of the strongest options. DSP and ITI appeal to those targeting higher growth with moderate volatility, while Bandhan and Franklin India align with conservative investors who prefer steadier, lower-risk performance.

As the tax-saving season peaks, experts say investors should focus on long-term track records, disciplined SIP investing, and diversified portfolios rather than short-term market movements. ELSS funds, despite their risks, remain one of the most effective ways to combine tax benefits with long-term wealth creation.