The objective of tax paying investor is to invest their money in an instrument that not only gives tax exemption, but also able to fetch maximum amount of return in the investment along with liquidity. Mutual funds are popular investment vehicle to diversify one’s portfolio and gain exposure to wide range of assets. Mutual funds investment offers investors to make investments in various financial instruments by utilizing the skill and knowledge of trained investment managers. A mutual fund is a trust that collects the  funds from a investors which has a common investment objective and invests the collected savings in different sorts of securities like equities, bonds, debt, etc. The mutual funds AMC,s are offering the funds which are eligible for tax saving under the Section 80 C  of Income Tax Act 1961, Rs 150000 can be saved through these schemes which not only gives tax benefit but also exposure to Equity market , that results into the higher returns with low lock in period. In this study five Equity linked saving schemes of different Asset management companies have beed selected to evaluate their performance on the basis of tools like Beta, Sharpe ratio, Jensen ratio, etc. It also suggests the way to select the scheme in the peer group on comparing the figures of these tools to achieve the Investment objectives. The data has been taken from various websites of different mutual companies, their factsheets and from Association of Mutual funds of India. The ELSS schemes have been compared, to guide investors regarding the selection of appropriate scheme considering risk and returns of the fund. As Investor must be aware of the risk associated with these ELSS schemes as compared to the traditional tax saving options Like PPF, NSC etc.

KEYWORDS: Mutual Funds, ELSS, Income Tax Act, Performance.