Tax saving mutual funds, also known as ELSS (Equity Linked Savings Scheme), are mutual fund schemes that offer tax deductions under Section 80C of the Income Tax Act. Investors can claim deductions up to ?1.5 lakh annually, making them an effective tool for tax planning. These funds primarily invest in equities and have a lock-in period of three years. Tax saving mutual funds not only help reduce taxable income but also have the potential to generate long-term capital growth, making them a popular investment option for individuals looking to save on taxes while building wealth.