Equity Linked Savings Scheme (ELSS) is a great mutual fund option that can help you save tax. Under section 80C of the Income Tax Act, all investments made in ELSS qualify for a tax deduction of up to Rs 1.5 Lakh.\r\rIf you decide to sell your equity mutual funds after a year, the returns will qualify for a 10% long term capital gains (LTCG) tax. If you sell your equity mutual funds within a year, you will have to pay a short-term capital gains tax of 15% on your returns. A 10% tax will be deducted from any dividend you gain.