Equity Linked Savings Schemes (ELSS) have witnessed record inflows in the first week of January 2026 as retail investors rush to complete their tax-saving investments before the financial year ends.
January Inflows
ELSS category performance in the first week:
- Total Inflows (Jan 1-5): Rs. 8,500 crore
- Net Folio Additions: 450,000
- YoY Growth: 35%
- Category AUM: Rs. 2.8 lakh crore
Why ELSS?
ELSS funds remain popular for their dual benefit of tax savings under Section 80C and potential for wealth creation through equity exposure.
- Lock-in Period: 3 years (shortest among 80C options)
- Tax Benefit: Up to Rs. 1.5 lakh deduction
- Returns Potential: 12-15% CAGR historically
Top Performing ELSS Funds
The best-performing ELSS funds over the past year include Quant ELSS Fund, Canara Robeco ELSS, and Mirae Asset Tax Saver.
Investor Behavior
Most retail investors tend to make tax-saving investments in January-March, despite financial planners recommending early-year investments or SIPs.
SIP vs Lump Sum
Experts recommend SIP mode for ELSS investments to average out market volatility, though lump sum investments are common during tax season.
Taxation on ELSS Returns
Long-term capital gains above Rs. 1.25 lakh are taxed at 12.5%, while dividends are taxed as per the investor’s income slab.
Investment Advisory
Financial advisors suggest investors complete their tax-saving investments before the last-minute March rush to avoid hasty decisions.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or a solicitation to buy or sell any securities. The views expressed are those of the author and do not represent the official position of Benzinga India. Readers should consult a SEBI-registered financial advisor before making any investment decisions. Benzinga India and its authors do not hold any positions in the securities mentioned in this article unless explicitly stated.
