The reform process has sent signals to a wave of changes in savings and investment behavior adding a new dimension to the growth of financial sector. The Indian financial system in general and the Mutual Fund (MF) industry in particular continue to take turnaround from early 1990s. During this period, mutual funds have pooled huge investments for the corporate sector. Growth and development of various mutual fund products in Indian capital market has proved to be one of the most catalytic instruments in generating momentous investment growth in the capital market. In this context, close monitoring and evaluation of mutual funds has become essential. Therefore, the present study evaluates the performance of 31 tax planning schemes in India over the period 199495 to 2001-2002. This paper has examined the investment performance of Indian mutual funds in terms of six performance measures. The results indicate that the fund managers under study have not been successful in reaping returns in excess of the market or in ensuring an efficient diversification of portfolio.