How to Invest in ELSS Mutual Funds for Tax Benefits and Long-Term Growth?

Summary: 

• ELSS (Equity Linked Savings Scheme) mutual funds are equity-oriented schemes. 

• They offer tax deductions of up to ₹1.5 lakh under Section 80C (only under the old tax regime). 

• ELSS funds come with a mandatory 3-year lock-in period. 

• Due to this lock-in, profits from ELSS are always treated as LTCG and taxed at 12.5% (subject to exhaustion of the ₹1.25 lakh annual exemption limit). 

• You can easily invest in ELSS funds from your smartphone through the airpay money mobile application. 

ELSS mutual funds are “equity-oriented” schemes that offer tax benefits under Section 80C, Income Tax Act, 1961. Investors can claim a deduction equal to 100% of the invested amount, up to ₹1,50,000 in a financial year. However, after the introduction of the new tax regime (in the Union Budget 2020–21), this deduction is available only if taxpayers choose the old tax regime while filing their Income Tax Return (ITR).  

But despite this restriction, ELSS mutual funds continue to attract investors. As per the AMFI monthly report (for Fiscal 2025), the total equity AUM stood at ₹29.5 lakh crore as of March 31, 2025. Out of this, ELSS funds accounted for nearly 8%, with an AUM of ₹2.36 lakh crore. 

So, do you also want to save on taxes while investing in the stock market? 

Read this article to first check out the primary features of ELSS tax-saver funds and then learn how you can easily invest in them online via the airpay money mobile application.   

Primary Features of ELSS Mutual Funds 2026 

As per SEBI guidelines, an ELSS fund must invest at least 80% of its assets in equity or equity-related instruments. This financial product comes with a statutory 3-year lock-in period, which is considered the shortest among tax-saving investment options, such as PPF or tax-saving FDs.  

Due to this 3-year lock-in, profits are always treated as Long-Term Capital Gains (LTCG). After the latest amendments introduced in the Union Budget 2025, this LTCG is taxed at 12.5%, with an annual exemption limit of ₹1.25 lakh. 

For more clarity, let’s check out some key features of ELSS tax-saver funds: 

Additionally, since ELSS funds are equity-based, they may offer the potential for higher long-term returns compared to traditional tax-saving instruments. However, at the same time, such schemes carry a higher market risk.  

How to Invest in ELSS Mutual Funds Online in 2026? 

Online investments in ELSS funds can be made through the airpay money mobile application. All you have to do is download the airpay money mobile application and create your account. Post-successful registration, complete your KYC, and follow these steps: 

1. Once logged in, go to the “Products” section available on the bottom navigation tab of the app. 

2. Under the “Investments” category, click on “Mutual Funds”. 

3. Scroll down to the “Curated Funds” section, where you will find different mutual fund themes. 

4. Click on “Tax Saving Fund” to view a list of available ELSS mutual funds. 

5. Browse through the listed ELSS funds, compare their details, and choose any scheme as per your risk appetite and investment objectives.  

Alternative Method 

• You can also click on “View All Mutual Funds” within the mutual funds section. 

• Then use the search option to look for “ELSS Tax Saver Fund.” 

• The app will display a list of all available ELSS mutual fund schemes from which you can select and invest. 

Some ELSS Tax-Saver Funds You May Consider in 2026 

For your reference, below is a list of some ELSS schemes you may invest in either through a lump sum or by starting a SIP. All these funds can be applied for directly through the airpay money mobile application: 

Disclaimer: The returns mentioned above are valid as of March 31, 2026. Investors are advised to conduct their own research before investing. 

Conclusion 

So now you know what ELSS funds are and how they offer both capital appreciation + tax savings. If we were to revise, ELSS funds invest at least 80% of their assets in equities or equity-related instruments (as per SEBI).  

100% of the invested amount (up to ₹1,50,000) can be claimed as a deduction under Section 80C when filing ITR under the old tax regime. These schemes also come with a 3-year lock-in period, and any profits are classified as Long-Term Capital Gains (LTCG).  

Looking to invest in mutual funds online? 

Download the airpay money mobile application and browse hundreds of “curated options”, grouped under themes, like better than FD, high returns, short-term investment, blue-chip fund, and more. We are a 360-degree financial wellness platform trusted by 1,00,000+ users.