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Tax Saving And The Best Tax-Saving Mutual Funds In 2022

13 October 20236 mins read by Angel One
Enjoy tax benefits with tax-saving mutual funds. Learn about ELSS mutual funds to invest in the best tax-saving mutual funds in 2022..
Tax Saving And The Best Tax-Saving Mutual Funds In 2022
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Tax-saving mutual funds or equity-linked savings schemes are specially designed investment instruments that allow investors to save tax under section 80C of the Income Tax Act. If tax saving is your concern, this article is for you. Before we begin, let’s familiarise ourselves with ELSS funds.

What are ELSS funds?

Tax-saving mutual funds offer tax savings along with income growth. Many investment schemes can help you earn good returns, but ELSS funds have a specific advantage over others. 

ELSS funds offer the best of both worlds. It allows you to reduce your tax burden while helping in wealth accumulation.  

Features of ELSS mutual funds

  • These are open-ended mutual funds.
  • ELSS mutual funds are equity investments that generate inflation-indexed returns over time.
  • Be mindful of the three years lock-in period. However, it has the shortest lock-in compared to the other government-backed 80C investment options.
  • You can invest up to Rs 1.5 lakh a year in ELSS and claim tax deductions.  
  • ELSS funds have generated an average return of 15 percent in the last ten years.

Best tax-saving mutual funds in 2022

If you want to begin your investor journey this year, here are our recommendations for the best tax-saving mutual funds in 2022.

  • Axis Long Term Equity Fund
  • BOI AXA Tax Advantage Direct-Growth
  • Mirae Asset Tax Saver Fund
  • Invesco India Tax Plan Fund
  • Canara Robeco Equity Tax Saver Direct-Growth
  • Quant Tax Plan Direct-Growth
  • IDFC Tax Advantage (ELSS) Direct-Plan-Growth
  • SBI Tax Saving Mutual Funds 
  • Kotak Tax saver Scheme 
  • DSP Tax Saver Fund (G)

Key features of the best tax-saving mutual funds, 2022

  • Tax-saving mutual fund schemes are designed to generate impressive returns from equity investment while providing tax relief to investors. 
  • These funds focus on investing in primary and secondary markets. 
  • Some schemes also invest in the international market. 
  • They will invest in companies with solid fundamentals without market capitalisation or sector bias. 

Things to consider before investing in tax-saving mutual funds

Return on investment

Before placing your money, compare the funds’ efficiency, performance and consistency over the years. 

Broker’s track record

You must select a regulated fund house with a proven track record. Sometimes, new and less-known companies lack experienced teams and infrastructure for efficient fund management. 

Fund manager’s background

Another factor to consider is the efficiency of the fund manager. Returns on your investment are directly linked to the fund manager’s abilities and experience in selecting the right stocks to build a solid portfolio. 

Expense-to-Income ratio 

The expense ratio is a portion paid by the investors for the fund management services. It is always better to choose funds with a lower expense ratio than the fund’s earnings. 

Know More About What is Expense Ratio in Mutual Funds?

Asset size

Larger asset size is indicative of solid performance by the fund. A large cash pool allows the fund manager to make confident investment choices to improve returns.

The threshold for an equity fund is Rs 50 lakh. 


You can select from the top 10 tax-saving mutual funds to invest in 2022. For investors who want to lower their tax burden, ELSS mutual funds promise the best solution. Additionally, regular investment provides an option for creating wealth for a long-term financial goal.

Start investing in a wide range of financial products with Angel One. Open your free Demat account in under five minutes. 

Disclaimer – This blog is exclusively for educational purposes. The securities quoted are exemplary and are not recommendatory.

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