Tax saving mutual funds differ from regular mutual funds primarily in terms of tax benefits and lock-in period. While traditional mutual funds don’t offer tax deductions, tax saving mutual funds allow investors to claim deductions under Section 80C up to ?1.5 lakh. Additionally, these funds have a mandatory three-year lock-in, which is shorter than most tax-saving instruments like PPF or NSC. The focus on equity investment also gives them a higher potential return, although it comes with market risks. They are suitable for investors seeking both tax savings and long-term capital appreciation.