A PROJECT REPORT

ON
"INCOME TAX PLANNING WITH RESPECT TO INDIVIDUAL
ASSESSEE"
AT
KOTAK MAHINDRA SECURITIES
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF

BACHELOR OF COMMERCE (TAX & PROCEDURE)

Submitted by
ABDUL RASHED
1062-20-406-014
MD ABDUL REHAN
1062-20-406-029
MD YUNUS AHMED
1062-20-406-012

Under the Guidance of

Ms. RUQIA FATIMA
(ASSISTANT PROFESSOR)

DEPARTMENT OF BUSINESS ADMINISTRATION

ANWAR-UL- ULOOM DEGREE COLLEGE (AUTONOMOUS)
(AFFILIATED TO OSMANIA UNIVERSITY)
NEW MALLEPALLY, HYDERABAD
(2020-2023)
ANWARUL ULOOM DEGREECOLLEGE
An Autonomous Muslim Minority Institution
(Affiliated to Osmania University)
# 11-3-918, New Mallepally, Hyderabad – 500 001., A.P., INDIA
Tel : 23340134, 30582660, 30582678, 30582666, 23342285 Fax: 23342750

Ref No………………………………. Date:……………………………..

CERTIFICATE

This is to certify that ABDUL RASHED bearing Roll No: 1062-20-406-014 , MD

ABDUL REHAN bearing Roll No: 1062-20-406-029, MD YUNUS AHMED
bearing Roll No: 1062-20-406-012 has successfully completed they project work
entitled “INCOME TAX PLANNING WITH RESPECT TO INDIVIDUAL
ASSESSEE., and submitted in partial fulfillment of the requirement for the award of
the Degree of Bachelor of Commerce (TAX & PROCEDURE) Administration by
Osmania University, Hyderabad.

This is a bonafide work completed under my guidance and supervision.

Signature of Internal Guide Signature of H.O.D

Signature of Principal
 DECLARATION

We, ABDUL RASHED bearing Roll No: 1062-20-406-014, MD ABDUL

REHAN bearing Roll No: 1062-20-406-029, MD YUNUS AHMED
bearing Roll No: 1062-20-406-012 the undersigned, hereby declare
that the project report entitled "INCOME TAX PLANNING WITH
RESPECT TO INDIVIDUAL ASSESSEE " carried out at KOTAK
MAHINDRA SECURITIES is our original work written and submitted
by us in partial fulfillment of the award of the degree of Bachelor of
Commerce (TAX & PROCEDURE) from Anwar-Ul-Uloom Degree
College, (Autonomous). We are also declare that this project has not
been submitted earlier in any other university or institution.

Date:

ABDUL RASHED
1062-20-406-014

MD ABDUL REHAN
1062-20-406-029

MD YUNUS AHMED
1062-20-406-012
 ACKNOWLEDGEMENT
We would like to acknowledge, our sincere thanks to Mr. Mohammed Abdul
Razzak, Principal of "Anwar-UI-Uloom Degree College (Autonomous)" for the
extended helping hand for the development of our career.
We wish to express our sincere thanks to Dr. Mohammed Ahmed Mohiuddin
H.O.D and our express and sincere thanks to our Project Guide
Ms. RUQIA FATIMA for sharing her valuable dine in providing her valuable
Knowledge, guidance and excellent support for the successful completion of my
project.

We express our sincere thanks to Mr. PARTHA DAS of KOTAK MAHINDRA

SECURITIES for sharing his valuable time in providing his valuable suggestions,
information and excellent co-operation for the successful completion of my Project.

We would like to acknowledge, our sincere thanks to all faculty members of "Anwar-
UI-Uloom Degree College (Autonomous)" who have extended helping hand in
giving the information being part of the study. We would like to express our gratitude
for all the people, who extended unending support at all stages of the project.

ABDUL RASHED
1062-20-406-014

MD ABDUL REHAN
1062-20-406-029

MD YUNUS AHMED
1062-20-406-012
 ABSTRACT

Mutual fund is the pool of the money, based on the trust who invests the savings of a
number of investors who shares a common financial goal, like the capital appreciation
and dividend earning. The money thus collect is then invested in capital market
instruments such as shares, debenture, and foreign market. Investors invest money and
get the units as per the unit value which we called as NAV (net assets value). Mutual
fund is the most suitable investment for the common man as it offers an opportunity to
invest in diversified portfolio management, good research team, professionally
managed Indian stock as well as the foreign market, the main aim of the fund manager
is to taking the scrip that have under value and future will rising, then fund manager
sell out the stock. Fund manager concentration on risk – return trade off, where
minimize the risk and maximize the return through diversification of the portfolio. The
most common features of the mutual fund unit are low cost.

One of the key sections under which individuals can save tax is the Section 80/C of
the Indian Income Tax Act. Under this section, investments up to `. 1,00,000 per
annum are eligible for deduction from your taxable income. One should plan to utilize
this section to the fullest by investing in some of the instruments shown alongside. Of
course, the ideal tax saving investments depends upon factors such as your financial
needs and goals, your risk appetite, etc.

Agents selling Mutual Funds often use jargon that investors find difficult to
comprehend. Steering away from complicated terms, we explain the basics of mutual
funds - how they work, and how best they can serve as an investment tool. So whether
you are planning for your house, child’s education or marriage, your car or vacations,
Mutual fund is a simple, tax efficient and effective tool to invest for these goals.
Besides, Mutual funds offer a wide bouquet of investment options – equity schemes,
fixed income schemes, money market schemes, hybrid schemes, ETFs etc. which you
can choose as per your needs.
 TABLE OF CONTENTS

CHAPTER NO DESCRIPTION PAGE NO

CHAPTER - I INTRODUCTION TO TOPIC 1

CHAPTER - II REVIEW OF LITERATURE 10

CHAPTER - III RESEARCH METHODOLOGY 16

CHAPTER - IV THEORETICAL FRAME WORK 21

CHAPTER – V COMPANY PROFILE 25

CHAPTER - VI DATA ANALYSIS AND INTERPRETATION 30

CHAPTER - VII RESEARCH FINDINGS & SUGGESTIONS 51

CHAPTER -VIII SUGGESTIONS & RECOMMENDATIONS 55

BIBLIOGRAPHY 58
 CHAPTER I
INTRODUCTION

1
 INTRODUCTION

The Indian financial system based on four basic components like Financial Market,
Financial Institutions, Financial Service, Financial Instruments. All are play important role
for smooth activities for the transfer of the funds and allocation of the funds. The main aim of
the Indian financial system is that providing the efficiently services to the capital market. The
Indian capital market has been increasing tremendously during the second generation
reforms. The first generation reforms started in 1991 the concept of LPG. (Liberalization,
privatization, Globalization).

Then after 1997 second generation reforms was started, still the it’s going on, its
include reforms of industrial investment, reforms of fiscal policy, reforms of ex- imp policy,
reforms of public sector, reforms of financial sector, reforms of foreign investment through
the institutional investors, reforms banking sectors. The economic development model
adopted by India in the post independence era has been characterized by mixed economy
with the public sector playing a dominating role and the activities in private industrial sector
control measures emaciated form time to time. The last two decades have been a phenomenal
expansion in the geographical coverage and the financial spread of our financial system.

The spared of the banking system has been a major factor in promoting financial
intermediation in the economy and in the growth of financial savings with progressive
liberalization of economic policies, there has been a rapid growth of capital market, money
market and financial services industry including merchant banking, leasing and venture
capital, leasing, hire purchasing. Consistent with the growth of financial sector and second
generation reforms its need to fruition of the financial sector. Its also need to providing the
efficient service to the investor mostly if the investors are supply small amount, in that point
of view the mutual fund play vital for better service to the small investors. The main vision
for the analysis for this study is to scrutinize the performance of five star rated mutual funds,
given the weight of risk, return, and assets under management, net assets value, book value
and price earnings ratio.

As you probably know, mutual funds have become extremely popular over the last 20
years. What was once just another obscure financial instrument is now a part of our daily
lives. More than 80 million people, or one half of the households in America, invest in
2
mutual funds That means that, in the United States alone, trillions (yes, with a "T") of dollars
are invested in mutual funds.

In fact, to many people, investing meaying mutual funds. After all, it's common
knowledge that incesting in mutual funds is (or at least should be) better than simply letting
your cash waste away in a savings account, but, for most people, that's where the
understanding of funds ends. It doesn't help that mutual fund salespeople speak a strange
language that, sounding sort of like English, is interspersed with jargon like MER, NAVPS,
load/no-load, etc.

Originally mutual funds were heralded as a way for the little guy to get a piece of the
market. Instead of spending all your free time buried in the financial pages of the Wall Street
Journal, all you have to do is buy a mutual fund and you'd be set on your way to financial
freedom. As you might have guessed, it's not that easy. Mutual funds are an excellent idea in
theory, but, in reality, they haven't always delivered. Not all mutual funds are created equal,
and investing in mutuals isn't as easy as throwing your money at the first salesperson who
solicits your business.
SELECTION OF A FUND

 OBJECTIVE OF THE FUND:

The Fund whether income oriented or growth oriented. Consistency of
performance: a mutual fund is always intended to give steady long term returns; hence the
investors should measure the performance of a fund over a period of at least three years.

 HISTORICAL BACKGROUND:
The success of any fund depends upon the competence of the management, its
integrity, periodicity and experience.

 COST OF OPERATION:
Mutual funds seek to do a better job of the investible funds at a lower cost the
he investible fund at lower cost. The investors compare with their funds with others.

 CAPACITY OF INNOVATION:

3
 Some companies’ introduced innovation schemes to meet the diverse needs of
investors. Investors will look for funds which are capable of introducing innovation in the
financial market.

 INVESTOR SERVICING:
The most important factor is prompt and efficient servicing. Service like quick
response to investors queries, prompt dispatch of unit certificates, quick transfer of units etc.,

FACILITIES AVAILABLE TO INVESTORS

 Re purchase facilities
 Reissue facilities
 Roll over facilities
 Lateral shifting facilities
TAX – SAVING FUNDS:
Section 80c has come as a boon to investors who have an appetite for risk.Until the
previous year, investment in tax – saving funds (otherwise known as Equity Linked Savings
Schemes) for the purpose of availing a tax benefit was restricted to Rs 10000 P.A In the
current year all such restrictions have been done away with; an individual assessee now has
the flexibility to invest the Rs 100000 that is allowed uncer section 80/c in any proportion
that he wishes (only in PPF is there an upper limit of Rs 70000 pa) in specified instruments.
Naturally, those with a risk appetite should be looking at increase their exposure to tax-
saving funds.
But now Tax Benefit will get up to Rs 1,00,000 .These leading tax-saving funds as on 14-11-
2005.

Tax saving funds are simply equity funds that have mandatory lock-in of three years.
The lock-in is one of the key strengths of such funds; it allows the fund manager to invest for
the longterm and also saves him from the pressures of managing fund inflows and outflows
on a day-to-day basis. In case of tax-savings funds, the fund outflows are known relatively
well in advance and therefore can be planned for.

4
 Before we delve further into understanding why tax-saving funds should be
considered for your portfolio,let us first understand risks associated with them.

RISK FACTORS IN MUTUAL FUND

Just like in any other investment, Mutual Fund investment also carry certain risks, the risks in
particular scheme of a mutual fund is a basically a function of five factor.

 MARKET RISK:
In generally, there are certain risks associated with every kind of investments
of shares. They are called market risks. The market risks can be reduced. But cannot be
completely eliminated even by good investment management. The prices of shares are
subjected to wide price fluctuations depending upon market conditions. Eg, cycle – boom
& slump and recovery.
 SCHEME RISKS:
There are certain risks inherent in the scheme itself. T all depends upon the
nature of the scheme. For instance, in a pure growth scheme, risks are greater. It is
obvious because if one expects more returns an in the case of a growth scheme, one has
to take more risks.

 INVESTMENT RISKS:
Whether the Mutual Fund makes money in shares or loses depends upon the
investment expertise of the Asset management Company (AMC). If the investment
advice goes wrong, the fund has to suffer a lot. The investment expertises of various
funds are different and it is reflected on the returns which they offer to investors.

 BUSINESS RISK:
The corpus of a Mutual Fund might have been invested in company’s shares.
If the business of that company suffers any set back, it cannot declare any dividend.

 POLITICAL RISK:
Successive Governments bring with them fancy new economy ideologies and
policies. It is often said that many economy decisions are politically motivated. Changed

5
 in Government bring in the risk of uncertainty which every player in the financial service
industry has to face. So Mutual Funds are no exception to it.

SYSTEMATIC PORTFOLIO MANAGEMENT

The goal of portfolio management is to assemble various securities and other assets
into portfolios that address investor needs and then to manage those protfolios so as to
achieve investment objectives. The investor’s needs are defined in term of risk, and the
portfolio manager maximizes return for investment undertaken.

• ASSET ALLOCATION
Security selection within asset classes asset allocation can best be characterized as the
blending together of major asset classes to obtain the highest long-run return at the lowest
risk. Managers can make opportnistic shifts in asset class weightings in order to improve
return prospects over the long-term objective. Also managers can improve return prospects
by selecting securities that have above average expected return within the individual asset
classes.

• Investment managers
Multitudes of investment management organization offer portfolio management
services to clients including mutual funds. Investments organization differ not only in size
and degree of specialization but also in their approaches to investment analysis and portfolio
management. On the whole, however the business portfolio management has tended toward
greater structure and discipline in the investment process and toward greater use of
systematic approaches to investing. Those organizations at the forefront in implementing
systematic approaches to portfolio management have gained market share at the expense of
other firms, in large part because they have been more effective in addressing client needs
and achieving investment objectives.

• Participants
Several groups other than professional portfolio managers are important participants
in the portfolio management process.
In marketing the asset allocation decision, major portfolio investors employ the service of
investment management consultants. These are organizations that specialize in not only

6
advising on asset allocation but other critical aspects, such as setting of goal and selection of
investment managers.

• Asset classes
Developing the appropriate asset allocation is a critical phase of the portfolio
management process.
Equities, bonds and money market instruments are major asset categories that are large, are
generally highly marketable and have tradionally been used extensively by longterm
portfolio investors.
Asset classes for portfolio investment
Corporates
Common stocks
Domestic equities
Large-capitalization
Small-capitalization
International equities
Major-country markets
Emerging markets
Bonds
Government and agencies
AAA-rated
Highly-yield (junk) bonds
Mortgage-backed securities
International bonds
Money market instruments
Treasury bills
CDs and commercial paper
Guaranteed investment contracts
Real estate
Venture capital

The portfolio management industry has evolved over the last two decades into a
structure with several distinct groupings of highly professional participants. Although the
current structure differs from the past, the critical components of the investment decision
7
process remain the same. Investors need to establish goals and be aware of the capital
market tradeoff in developing an asset allocation that the best meets the return target at an
acceptable level.

There are three based areaswhich investing styles differ. All influence the risk,
returns and period of investment and involve finding a sport between the extremes that suits
the fund and investors the best.

Attitude: does it follow a top-down approach (first list industries or sectors for investment
and then select specific companies within these industries) or a bottom-up approach
(individual stocks which are likely to outperform the market are identified first and only then
study the industry or macro level factors)?

Intensity of management: is the scheme actively (review the portfolios regularly) or

passively (less intensely managed stocks)?

DISTRIBUTION NETWORK:
The rapid accumulation in assets of mutual funds creates more challenges, most
important among them being the distribution network. For the long-term health of the
industry, it is crucial that investors who come into a fund come with a full understanding of
the risks involved in the investment. And distributors play an important role in dissemination
of such information. At present, the majority of funds rely on branch network of banks in
order to sell their products since the branch network of most fund houses is restricted to a
few cities.

AFTER-SALES SERVICE:
In India typically the distributor’s role comes to an end as soon as the product is sold
to the investor. For subsequent transactions-redemption or switchovers-the investors often
has to get back to the fund itself. An investor’s interface with a fund would be simpler if the
whole range of services, from deciding on the right product to processing the final
redemption request, is handled by a singled entity.

BASIC MUTUAL FUND INVESTMENT INSTRUMENT

Mutual Funds are investing in 3 types of funds:
 Stocks
8
  Bonds
 Money market instruments

Broadly, Mutual Funds invest basically in 3 types of asset classes.

1. Stocks:- Stocks represent ownership or equity in a company popularly known as
shares.
2. Bonds:- These represent debt from companies, financial institutions or government
agencies.
3. Money Market Instruments:- These include short – term dent instrument such as
treasury bills, certificate of deposits, and inter bank call money.
Mutual Fund can be classified based on their objectives as:
 Sector equity schemes:- These schemes invest in share of companies in as specific
sector.
 Diversified equity schemes:- These schemes invest in shares and fixed income of
the economy of companies across different sectors.
 Hybrid economy schemes:- These schemes invest in a mix shares and fixed income
instruments.
 Income schemes:- These schemes invest in fixed income instruments such as bonds
issued by corporate and financial institutions, and government securities.
 Money Market schemes:- These schemes invest in short – term instrument such as
certificate of deposits, treasury bills and short – term bonds.

9
 CHAPTER II

REVIEW OF LITERATURE

10
 ANALYSIS OF MUTUAL FUND

Broadly the analysis categories in 3 types:

 Fundamental analysis
 Technical analysis
 Beta/Modern portfolio theory (MPT)

FUNDAMENTAL ANALYSIS:
The analysis of such fundamental factor general business conditions, industry
outlook, earnings, dividends, quality of management etc.,
In this take consideration on the some following factors:-
1. Company net asset value.
2. Estimation of “True”.
3. Value of profit earning ratio.
4. Estimating the market value of current and forecasting.
5. Compare with various ratios like US, UK.
6. Estimate the future yield dividends.

 Stock rating:
The rating for common stock depends over the certain of dividend in take the
consideration followings….
1. Ingredients of security analysis.
2. It include historical data, sales, capital etc.,
 Economic analysis:
1. Cyclic effect
2. Economic analysis (fashions)

 Financial analysis:
1. EPS
2. EBIT
3. ROI
4. PAT

11
 Rating;
1. AAA – high investment grade: Debentures rated “AAA” are judged to offer
highest safety of timely payment and interest and principles.
2. AA – high safety: It is offer highest safety of timely payment and interest and
principles.

Investment grades
3. A – adequate safety: Debentures rates “A” are judged offer highest safety of
timely payment and interest and principles.
4. BBB –moderate safety BBB are judged to offer sufficient safety of timely
payment and interest and principles.

Speculative grade:
5. BB – Inadequate safety: Debentures rated “BB” are judged to offer timely
payment and interest and principles.
6. B – high risk
7. C – substantial risk: Timely payment possible only in favorable circumstances
continues.
8. D- In default

BETA / MPT ANALYSIS

Analysis the responsiveness of the price of a particular company stock
to change in the value some market average.

TECHNICAL ANALYSIS:
An analysis of market based factors such as Stock price movements,
charts etc.,

TYPES OF MUTUAL FUND SCHEMES

BY STRUCTURE:
 OPEN – ENDED SCHEME
 CLOSED – ENDED SCHEME
 INTERVAL SCHEME
12
BY INVESTMENT OBJECTIVE:
 GROWTH SCHEME
 INCOME SCHEME
 MONEY MARKET SCHEME

OTHER SCHEMES:
 TAX SAVING SCHEME
 SPECIAL SCHEME
 INDEX SCHEME

Mutual Fund broadly classified into TWO categories:

1. Open – Ended Scheme funds
2. Closed – Ended Scheme funds
Now discuss details regarding above funds

OPEN - ENDED SCHEME FUND:

The concept of these funds is that the investors are free to enter or exit the
scheme at any point of time during the fund period. The investors can purchase/ sale units of
mutual fund through mutual fund trust. The prices at which the units are purchased/ sold
depend on the NAV of the fund. At that point of time as specified by the funds. The NAV of
fund is the current market value of their investments. Besides the Net Asset Value, certain
funds take an additional charge from the investors in the form of Entry load or Exit load.
Some Examples of Open – Ended scheme funds are:
 Templeton India Growth Fund.
 PruICICI Discovery Fund.
 Kotak Opportunities
 Principal Dividend Yield Fund.
 Reliance Growth Fund.

CLOSED – ENDED SCHEME FUND:

In the care of close ended fund, the investors have to look their funds with the
trust for particular periods of time as a specified y the terms of the offer. The main problem
for the investor is that they cannot move in out of the fund freely. In the case of Closed –
13
Ended schemes the prices of the units are calculated in the same manner as in the case of
Open – Ended schemes. However these schemes do not charge an Entry/ Exit load as in the
case of open – ended scheme.

INTERVAL SCHEME FUND:

The concept of these funds is that the investors are free to Enter/ Exit the
scheme at any point of time during the fund period and the investors have to lock their funds
with the trust for a particular periods of time as a specified by the terms of the offer.

GROWTH FUND:
It is primarily look for growth of capital such funds invests in shorter with
potential for growth and capital appreciation. They invest in well – established companies
where the company it self and the industry in which it operates are thought to have well long
– term growth potential and hence growth fund provide low current income. Growth potential
generally incurred higher risks than Income Fund, in an effort to secure more pronounced
growth. Some growth funds concentrate on one or more industry sectors and also invest in a
Broad range of industries. Growth funds are suitable for investors who can offer to assume
the risk of potential loss in value their investment in the short – term in the hope of achieving
substantial and risings gains.
Eventually they are not suitable for investors who must conserve their
principal or who must maximize current income.

GROWTH AND INCOME FUND:

Growth and Income funds seek long – term growth of capital as well as
current income. The investment strategies used to reach there goals very among funds. Some
invest in a dual portfolio consisting of growth stock and income stocks, or a combination of
growth stocks paying high dividends preferred stock, convertible securities or fixed income
securities such as corporate bonds and money market instruments.
Growth and Income funds have low to moderate stability of principal and
moderate potential for current income and growth they are suitable for investors who can
assume some risk to achieve growth of capital but who also want to maintain a moderate
level of current income.

14
MONEY MARKET SCHEME:
It is invested only in high liquidity; short- term top – rated money market
instruments. Money market funds are suitable for investors who want high stability of
principal and current income with immediate liquidity.

LAW RELATING TO TAX SAVINGS U/S 80

B.Deductions in respect of certain payments

75[Deduction in respect of life insurance premia, deferred annuity, contributions to provident

fund, subscription to certain equity shares or debentures, etc.

7680C. 77(1) In computing the total income of an assessee, being an individual or a Hindu
undivided family, there shall be deducted, in accordance with and subject to the provisions of
this section, the whole of the amount paid or deposited in the previous year, being the
aggregate of the sums referred to in sub-section (2), as does not exceed one lakh rupees.

(2) The sums referred to in sub-section (1) shall be any sums paid or deposited in the
previous year by the assessee

(i) to effect or to keep in force an insurance on the life of persons specified in sub-section (4);

(ii) to effect or to keep in force a contract for a deferred annuity, not being an annuity plan
referred to in clause (xii), on the life of persons specified in sub-section (4):

Provided that such contract does not contain a provision for the exercise by the insured of an
option to receive a cash payment in lieu of the payment of the annuity;

(iii) by way of deduction from the salary payable by or on behalf of the Government to any
individual being a sum deducted in accordance with the conditions of his service, for the
purpose of securing to him a deferred annuity or making provision for his spouse or children,
in so far as the sum so deducted does not exceed one-fifth of the salary;

(iv) as a contribution by an individual to any provident fund to which the Provident Funds
Act, 1925 (19 of 1925) applies;
15
 CHAPTER III
RESEARCH METHODOLOGY

16
 NEED FOR THE STUDY

To analyze the concept of tax saving schemes in insurance better and for making
customer awareness analysis towards insurance. First a sample survey should be done on
these things to know the awareness level of customers in this regard and by this the
satisfactory levels of the existing investors who have already invested in life insurance.

There is more competition in this industry so there is a need to retain the customer
with the organization. So to sustain in the market the company has to follow various
strategies by attracting new investors and to retain the existing investors.

17
 OBJECTIVES OF THE STUDY

 To study the tax savings scheme on mutual funds, its performance in the market, and
its exposure to stock.

 To study the potential of mutual funds in Kotak Mahindra Securities co.ltd.

 To analyse the performance of various mutual funds schemes and suggests the best
one.

 To know the present satisfactory levels of existing policyholders.

 To know the reasons for preferring life insurance.

 Our main objective is to selling the various life insurance policies and creating need
to the customer to save their amount.

 To create awareness among the customers.

 Less among the customers about different products of Centrum direct.

18
 RESEARCH METHODOLOGY

HO. THERE IS NO DIFFERENCE BETWEEN OBSERVED AND EXPECTED

FREQUENCIES.

H1: THERE I S DIFFERENCE BETWEEN OBSERVATION AND EXPECTATION

METHODOLOGY
The objective of the present study can be accomplished by conducting a
systematic market research. Market research is the systematic design, collection, analysis
and reporting of data and findings that are relevant to different marketing situations
facing the company. The marketing research process that will be adopted in the present
study will consist of the following stages:

a. Defining the problem and the research objective:

The research objective states what information is needed to solve the problem.
The objective of the research is to derive the opinion of the users and opinion of the
potential customers.

b. Developing the research plan:

Once the problem is identified, the next step is to prepare a plan for getting the
information needed for the research. The present study will adopt the exploratory
approach wherein there is a need to gather large amount of information before making a
conclusion. If required, the descriptive and casual approaches may also be used.

c. Collection and Sources of data:

Market research requires two kinds of data, i.e., primary data and secondary data.
Being a firm in financial services, data gathering will involve usage of both primary and
secondary data though there

Company Address

Address: 8-2-672/5, Ground Floor, IIyas Mohammed Khan Estate, Road Number 1, Near
Kachari Bakery, Banjara Hills, Hyderabad, Telangana 500034

19
 Proposed statistical Tools for the study

Descriptive statistics- mode , percentages, frequencies, bar graphs and pie

charts

Mann-Whitney Test

Correlation Analysis

Chi-square

Ratio Analysis

TOOLS USED IN THE ANALYSIS

 Statistical tools

 Financial tools

Research gap

Period of study
4 years data Time gap 2016 completed study from 2016_2021

LIMITATIONS OF THE STUDY:

 The study is limited to the mutual Fund of Kotak Mahindra Securities.

 It studies about its performance and tax savings.

 The duration of the study is limited.

 Respondent’s suggestions may or may not be correct.

 Researchers don’t have experience.

 Factors considered in the questionnaire may or may not be Sufficient.

 Sample size is too low to get the proper information.

 As many customers are not willing to give their opinions, we are unable to get

Proper information.

20
 CHAPTER IV
THEORETICAL FRAME WORK

21
A mutual fund scheme is a collective investment scheme designed to provide benefits of
diversified investment portfolio and expert management advice and management to a large
number of investors, through institutionalized risky pooling mechanism. It endeavors to offer
high yields than available on alternative investment instruments and provide relatively higher
degree of safety both for yield as well as return of capital. A very common aspect of mutual
funds is its capacity to offer different suitable schemes of investment to satisfy the diverse
income needs of investors.

GENESIS OF MUTUAL FUNDS

The modem concept of mutual funds is of recent origin but in a primitive form they have
existed since long. At the very dawn of commercial history, Egyptians and Phoenicians sold
shares in Caravans and vessels so as to spread the risk of these perilous ventures. Much later,
in 1622 Society General de Belguique was formed which embodied the modem concept of
risk-sharing. The foreign and colonial Government Trust of London (formed in 1868) was
the real pioneer of modem mutual funds. By the 1930 s, a large number of closed-ended
mutual funds were formed in the united states of America. After 1930, open ended
companies were also formed in the United kingdom which later spread to many other
countries in Europe, Asia, Far east, Latin America and Canada. Investment trust companies
set up on the west European model following recommendation of central Banking Enquiry
committee in the 1930 s were the fore-runners 24 of Indian mutual funds.

The mutual fund industry is growing at an unprecedented rate the world over and ranks as the
sixth largest sector in the financial industry.

History of mutual growth in India Once becoming popular in countries like USA,
Britain,Italy Japan,etc, the concept of mutual fund took root in India in the early sixties. The
whole concept of mutual funds in India was mooted by late Shri T.T.Krishnamachari, who
wrote to then prime minister of India Pandit Nehru outlining the need for such an Institute
which would actively mobilize untapped household saving of middle and small investors and
channelise these resources to provide the industrial sector of India the impetus for rapid
growth. In 1963, Pandit Nehru called upon Sri Rrishnamachari, who was back as union
finance minister to introduce and pilot the Unit Trust of India Bill through the parliament. On
the occasion of introducing the UTI Bill, Shri Krishnamachari told the parliament and quote,
I would christen this attempt as an adventure in small saving and an confident that we are

22
embarking on this adventure with every hope of being successful. He also informed the
parliament about the desire of the Government to give the small investors in UTI as well as
UTI certain tax benefit which would in turn provide an additional incentive for the mutual
funds moment in India. Thus UTI Act 1963 was passed and in 1964, the Unit Trust of India,
the first mutual funds of India came into existence. Initially it took around 14 years to
achieve the magic figure of RS.100 cores of sales. This was perhaps due to investor s
ignorance about capital market and also due to less active capital market. But the eighties
saw a tremendous growth in real terms.

This was primarily because of opening up of our market to foreign investments, liberalization
of economy and investor s awareness. Up to 1986, UTI was the only MF dominating the
Indian capital market scenario. By then the Government of India allowed commercial bank to
set up mutual funds.

The funds invest its resources in various companies operation in a specific industry
foreseeing growth potential. Eg.canexpo & ICICI power TAXATION FUNDS: There are
specific funds which are designed to avail of certain tax exemptions either in domestic or in
foreign capital markets. This fund provide tax reliefs under sections like 88,80cc,80ccB, etc.
The Tax shield which everybody clamored for is available from this financial year. TABLE
OF TAX SAVING MUTUAL FUNDS Sl.No Name of the Mutual Fund Scheme Time of
Issue 1 UTI ULIP Oct 1971 MEP91 Feb 1991 MEP92 Feb SBIMF MTSS-89 Mar 1989
MTSS-90 Mar 1990 MELS-91 Mar 1991 Magnum GIFT Mar CANBANK MF Can 80 cc
Mar 1990 Canstar 80L Sept 1990 Can pep Feb BOIMF BOINANZA 80 cc Jan INDBANK
MF Ind 88 A Sep 1990 Ind Shetter Mar PNBMF PNB ELSS 80 cc b Feb 1991 PNB ELSS
Feb LIC MF Dhan 80 cc Mar 1991 Dhan 80 cc(2) Mar Capital gain tax LIC MF Dhanraksha
June 1989 Dhanavridhi June Offshore tax rebaste UTI India Fund Aug 1986

 Availability of Funds: It is prime factor which influences Non-institutional Investors

Decisions the most. Most of the investors of this category don‟t have huge funds to be
invested. A large amount of these investors are not regular in chosen time horizon due to
irregular income.

 Economic status: It is a reason of worry as per capita income is very low. The earning
members of a family is only one or two, hence the amount available for savings is very less
23
or nil.  Social and Religious factor: The society do not motivates heavily for investment a
social or cultural scenario in Rajasthan is very expensive if it is compared with Gujarat and
few other states of the country.

 Educational Status: There is lack of investment education among Non-institutional

investors, as well as lacking with the basic education also. However a pleasing development
has been seen in this area.

 Local economic factors: Size of the local market and the demand generated by the local
purchasing power Influences on the non-institutional investor decision.

 Risk of an investment: The risk taking attitude is very low. Most of the investors want to
play safe. This always restricts the diversification investment portfolio.

 Tax Aspects of investments: It is again a question that how many of the investors of this
category files income tax. A large amount of Non-institutional investors is not interested in
higher tax savings instruments like ELSS, ULIP etc but are more demanding towards Bank
fixed deposits, investment in real estate, investment in gold etc.

 Investment horizon: Non-institutional investors generally don‟t go beyond a time horizon

of 3- 5 years. ULIP polices of most of the insurers are not reaching to the maturity because it
takes average 15-20 years, which is very far compared to the mind set of 3-5 years.

24
 CHAPTER V

COMPANY PROFILE

25
 COMPANY PROFILE

About our Share Broking Services

Kotak Securities was founded in 1994 as a subsidiary of Kotak Mahindra Bank and is proud
to be the nation’s best broker* today.
Our numbers speak for ourselves:
17 Lakh customer accounts
Over 8 Lakh trades per day
Our national footprint is 1,539 branches, franchisees and satellite offices
We cater to customers from 393 cities across India
We are corporate members with the Bombay Stock Exchange(BSE) and the National Stock
Exchange(NSE). We are also a depository participant with National Securities Depository
Limited (NSDL) and Central Depository Services Limited (CDSL).

* Adjudged as the Best Broker by FinanceAsia Country Awards, 2020

* The above numbers are as on December 31, 2020.
Our Services

So what does investing with India’s largest stock broking firm mean for you as a customer?
Well, all your stock broking needs get managed under one roof. No more running from pillar
to post, to keep track of your finances!

Stock Broking services

Trade in the Stock Market, invest in IPOs, Mutual Funds or Currency Derivatives using
whichever mode that suits you best. Online, offline or even on our stock trading app, we
offer stock trading at your fingertips.

Portfolio Management services

Not sure of what stocks to buy or sell? Unable to keep all your investments in one place?
Don’t know how to make your money work for you? Our Portfolio Management
Service with expert advice is just the answer for your woes.

Dual benefit: Stock Brokers + Depository Participants

Kotak Securities is not just a stock broking firm. We are also participants with depositories
like the NSDL and the CSDL. That means you can now execute transactions using our stock
broking services and settle your trades using our depository services!

Research Expertise
Benefit from in-depth stock market analysis thanks to our dedicated research division. We
publish various sector-specific research, company-specific research, macroeconomic studies,

26
fundamental and technical analysis of stocks that you can avail before investing your hard-
earned money.

Updated Market Data

Apart from research that we offer, you benefit from the street smart tips, up-to-the-minute
market information and inside news that our extensive sales teams deliver on a daily basis.

International Reach
Your financial interests go beyond India? Don’t worry, so do ours! Kotak Securities has a
well-entrenched presence in the Asia Pacific, European, Middle Eastern and American
markets. You can trust us with your money in any part of the globe.

We did it first

Helping you invest your money is a job we take very seriously. Which is why we pioneered
some of these services. Here’s a quick look:

 Mobile stock trading app to keep track of your investments on the go

 Facility of Margin Finance for online stock trading

 Investing in IPOs and Mutual Funds over the phone

 SMS alerts before execution of depository transactions

 AutoInvest - A systematic investing plan in Equities and Mutual funds

 Provision of margin against securities automatically using shares in your demat

account

Awards and Recognition

 Best Broker by FinanceAsia Country Awards, 2020

 Gold at ACEF for Email marketing & successful use of technology

 Silver at ACEF for Data driven marketing & successful of technology

 Bronze at IAMAI, 2018 in the category “Best Omni Channel Campaign Management
and Marketing automation”

 Awarded “Early adopter of Analytics” at Machine learning conference 2018 for using
Analytics extensively in client management

 Award for Highest AUM in ETF category awarded by Kotak AMC

 Best Brokerage India 2018 – by Triple A Asset Country Awards in the Best Advisors
South Asia Category

 Best Retail IPO Bidding Member, 2018 by NSE

27
 NSDL Star Performer Award in category “Top Performer in New Accounts Opened –
(Non- Bank) – 1st Position 2015, 2016, 2017 and 2018

 Best Local Brokerage and Best Overall Country Research, 2016 by Asia Money
Brokers Poll

 Smart Order Routing has been awarded with Finnoviti 2015 by Banking Frontiers

 Adjudged as Best Broker India by FinanceAsia Country awards, 2015, 2014.

 Broker of the Year (India) - The Asian Banker's Financial Markets Business
Achievement Awards 2014

 Overall best Equity Broking House by BSE IPF - D&B Equity Broking Awards for
the year 2013

 Depository Participant of the year by BSE IPF - D&B Equity Broking Awards for the
year 2013

 Top Performer in New Accounts Opened (Non-Bank Category) - NSDL Star

Performers Award 2013

 Fastest growing Equity Broking House by BSE IPF - D&B Equity Broking Awards
for the year 2012

 The Best Equity House in India by FinanceAsia for the year 2012

 *Best Broker in India by FinanceAsia for 2012, 2010 & 2009

 UTI MF - CNBC TV18 Financial Advisor Awards - Best Performing Equity Broker
(National) for the year 2009

 Best Brokerage Firm in India by Asiamoney in 2009, 2008, 2007 & 2006

 Best Performing Equity Broker in India by CNBC Financial Advisor Awards for
2008

 Avaya Customer Responsiveness Awards for 2007 & 2006 in the Financial Services
Sector

 The Leading Equity House in India in Thomson Extel Surveys Awards for the year
2007

 Best Provider of Portfolio Management: Equities by Euromoney for 2007 & 2006

 Best Equities House In India by Euromoney Award for the year 2005

 Best Broker in India by FinanceAsia for the year 2005

 Best Equity House in India by Finance Asia for the year 2004

28
Here’s a list of some of our recent marketing awards:

 Bronze for Acquisition campaign in the category of Best Use of Data for New
Business & for PPC (HCGBB) in the search category awarded by Campaign India’s
Digital Crest Awards, 2016

 Bronze for Best Single Radio Commercial in Insurance, Banking & Financial services
at Golden Mikes Awards 2016 by Exchange4media

 Gold for Effective Use of Market research, Bronze for Effectiveness in Radio and
Bronze for Innovation in Cupshup campaign awarded to Agar Magar Campaign at
Asia Pacific Customer Engagement Award 2015 - 16

 Silver award Best SEO for Website at DMAI 2015

 Best SEO for Website at India Digital Media Awards (IDMA) 2015

Here’s our recent research award:

 Favourite Analyst Awards at Research bytes IC Awards 2015 in Research House,

Financials, Materials and Multi Sector categories

Service

We recognize that there are many options online and offline to buy or sell stocks. While good
products and low prices can be offered by many, what sets apart a truly dedicated company is
the service they provide to their customers.

Like Kotak Securities.

We have been honoured with various awards that celebrate our exceptional focus on
customer service. These include the "Overall best Equity Broking Houseand and Depository
Participant of the year by BSE IPF - D&B Equity Broking Awards" for 2013, NSDL Star
Performers Award 2013 – Top Performer in New Accounts Opened (Non-Bank Category)
and "Best Broker in India Award, by FinanceAsia” for 2012, 2010 and 2009,"

29
 CHAPTER VI
DATA ANALYSIS AND
INTERPRETATION

30
 LEADING TAX-SAVING FUNDS

Tax-Saving Funds NAV 1-yr 3-yr 5-yr Std Sharpe

2020-2021 (Cr’s) (%) (%) (%) Dev Ratio

(%) (%)
MAGNUM TAX GAIN 46.98 116.8 91.7 29.5 8.81 0.58

HDFC TAX SAVER (G) 100.6 92.6 79.9 42.2 8.07 0.53

PRU ICICI TAX PLAN (G) 66.89 76.8 78.5 40.3 9.87 0.39

HDFC LT ADVANTAGE (G) 67.57 61.2 75.0 - 7.81 0.47

BIRLA EQUITY PLAN 45.46 58.9 72.0 29.3 7.95 0.38

TATA TAX SAVING 31.54 53.1 72.3 30.4 7.21 0.35

SUNDARAM TAX SAVER 17.94 59.9 63.5 31.5 8.55 0.39

FRANKLIN INDIA TAX 88.24 50.0 58.3 28.0 6.77 0.42

SHIELD(G)

INTERPRETATION:
MAGNUM TAX GAIN has NAV of Rs. 46.98 crs. It has standard deviation 8.81%
by using sharpe ratio it has 0.58%.

HDFC TAX SAVER has NAV of Rs. 100.6 crs. It has standard deviation 8.07% by
using sharpe ratio it has 0.53%.

PRU ICICI TAX PLAN has NAV of Rs. 66.89% crs. It has standard deviation 9.87%
by using sharpe ratio it has 0.39%.

HDFC LT ADVANTAGE has NAV of Rs. 67.57% crs. It has standard deviation
7.81% by using sharpe ratio it has 0.47%.

BIRLA EQUITY PLAN has NAV of Rs. 45.46% crs. It has standard deviation 7.95%
by using sharpe ratio it has 0.38%.

31
 TATA TAX SAVING has NAV of Rs. 31.54% crs. It has standard deviation 7.21%
by using sharpe ratio it has 0.35%.

SUNDARAM TAX SAVER has NAV of Rs. 17.94% crs. It has standard deviation
8.55% by using sharpe ratio it has 0.39%.

FRANKLIN INDIA TAX SHIELD has NAV of Rs. 88.24% crs. It has standard
deviation 6.77% by using sharpe ratio it has 0.42%.

PRUICICI TAX PLAN

Snapshot:
Fund Managers : Sankaran Naren
Indicative Investment Horizon: 3 yrs & more
Inception date: 19-08-1999
Fund Size: Rs. 242.97 crores
NAV (As on 31-January-2021):
Growth option: Rs. 76.27
Dividend option: Rs. 29.13
 NAV (As on 05-April-21):
 Growth option: Rs. 81.88

**Expense Ratio for the month of Jan'06: 2.36%

**This is a close approximation of the number.

32
Rs.10,000 invested at inception: Tax Plan Vs S&P CNX Nifty:

Sector Allocation:

Portfolio:-

Market Value % to
Company / Issuer
( Rs Lakh) NAV
Auto 2,762.15 1.34%
Hero Motocorp 2,762.15 1.34%
Auto Ancillaries 6,516.80 12.42%
• Sundaram Clayton Limited 4,325.60 3.90%
• Exide Industries Limited 139.95 3.24%
Sundaram Brake Linings Ltd 318.65 1.17%
Kesoram Industries Limited 48.85 1.08%
Rane Madras Limited 331.85 1.03%
Rane Holdings Limited 619.90 1.03%
Rane Brake Linings Ltd 732.00 0.97%
Banks 504.21 3.17%
Corporation Bank 374.06 1.54%
Punjab National Bank 29.50 1.15%
Bank of Baroda 100.65 0.48%

33
Cement 1258.15 5.65%
• Century Textiles & Industries Ltd 809.70 4.00%
Orient Paper & Industries Limited 24.30 1.05%
Pokarna Ltd 424.15 0.60%
Chemicals 4929.4 6.04%
Andhra Sugars Ltd 126.95 2.97%
India Glycols Limited 748.40 1.38%
Navin Flourine International Ltd 3,752.30 1.09%
Ultramarine & Pigments Ltd. 301.75 0.60%
Consumer Non-Durable 4555.7 8.29%
• Mawana Sugars Ltd 103.85 3.50%
Pidilite Industries Limited 2,093.10 2.37%
Godrej Consumers 770.05 1.95%
Harrisons Malayalam Limited 145.15 0.41%
United Breweries Ltd 1,443.55 0.06%
Ferrous Metals 93.35 0.21%
Tayo Rolls Ltd 93.35 0.21%
Fertilizers 1240.4 8.33%
• DCM Shriram Consolidated Limited 948.30 3.47%
Gujarat State Fert & Chem Limited 138.80 2.98%
Zuari Industries Limited 153.30 1.88%
Finance 12.25 0.08%
Reliance Capital Ventures Ltd 12.25 0.08%

34
 Market Value % to
Company / Issuer
( Rs Lakh) NAV
Hardware 16.10 1.77%
HCL Infosystems Ltd 16.10 1.77%
Hotels 191.55 2.00%
Taj Gvk Hotels & Resorts Ltd 135.35 1.24%
Oriental Hotels Limited 56.20 0.76%
Industrial Capital Goods 298.21 4.16%
Aban Lloyd Chiles Offshore Limited 45.85 3.12%
Numeric Power Systems Ltd 252.36 1.04%
Industrial Products 8,571.95 4.95%
Polyplex Corporation Limited 2,347.90 1.46%
M M Forgings Limited 839.95 1.41%
Supreme Industries Limited 1,720.60 1.08%
Esab India Limited 3,663.50 1.00%
Minerals/Mining 140.20 0.86%
Gujarat Mineral Development Corporation
Ltd 140.20 0.86%
Non-Ferrous Metals 71.15 1.55%
• National Aluminium Company Limited 71.15 1.55%
Oil 235.14 0.45%
Hindustan Oil Exploration Ltd 193.00 0.44%
Reliance Natural Resources Ltd 42.14 0.02%
Petroleum Products 2,577.20 2.33%
Reliance Industries Limited 2,577.20 2.33%
Pharmaceuticals 3741.1 13.58%
• Sun Pharmaceuticals Limited 838.55 5.58%
• FDC Limited 236.70 4.37%
• Zydus Lifesciences Ltd 356.30 3.33%
Tatva Chintan Pharma Chem Limited 2,309.55 0.29%
Power 87.95 0.44%
Gujarat Industries Power Co Limited 76.20 0.29%
Reliance Energy Ventures Ltd 11.75 0.16%
Software 551.2 3.49%
Subex Systems Limited 25.90 2.35%
KPIT Technologies Limited 525.30 1.14%
Telecom Services 925.60 0.53%
Tata Communications Limited 925.60 0.53%
Textiles - Cotton 304.05 4.04%
Precot Mills Ltd 232.45 2.98%
Maral Overseas Limited 71.60 1.06%
Textiles - Products 1149.8 3.33%
35
 Market Value % to
Company / Issuer
( Rs Lakh) NAV
Raymond Limited 908.75 2.85%
K. G. Denim Limited 34.90 0.46%
Nitin Spinners Ltd 206.15 0.02%
Textiles - Synthetic 2,281.00 3.41%
• SRF Limited 2,281.00 3.41%
Cash, Call, CBLO & Reverse Repo 245.06 1.01%
Other Current Assets 870.08 3.58%
Total Net Assets 24297.43 100.00%
• Top Ten Holdings

QUANTITATIVE INDICATORS:
Average P/E : 16.50
Average P/BV : 2.59
Average Dividend yield : 1.26
Annual Portfolio Turnover Ratio : 2.97 times

Portfolio turnover has been computed as the ratio of the higher value of average
purchase and average sales, to the average net assets in the past one year (since inception for
schemes that have not completed a year). The figures are not netted for derivative
transactions.

Rs In Crs
Assets held as on Jan 31, 2021 Rs 24,377 Crs
Equity 59% 13,460
Debt 41% 10,917
Total 100% 24,377

Assets held by :

Other than Linked policy

7,464
holders
Linked policy holders 16,913
24,377

36
 KOTAK ELSS

OPEN – ENDED EQUITY LINKED SAVING SCHEMES

ABOUT THE SCHEME:
A diversified equity scheme that invests in equity and equity related securities and
enable investors to avail the income tax rebate, as permitted from time to time. The
investment strategy is to have 80 – 100 % in equity portion and 0 – 20% in one equity
portion.
Ideal Investment Horizon: 3 years and above.
Corpus: Rs.106.73 crores
Ratio: Portfolio P/E : 27.07
 NAV (As on 31 – January – 21):
o Growth option: Rs.11.586
 NAV (As on 05 – April – 21):
o Growth option: Rs.13.72

PERFORMANCE:

37
SECTOR ALLOCATION:

38
PORTFOLIO:-

% to Net
Name of the Instrument Industry/ Rating
Assets
Equity & Equity Related (Listed/ Awaiting
listing)
Jaiprakash Associates Ltd Construction 3.6
National Aluminium Company Ltd Non-Ferrous Metals 3.4
Areva T and D India Ltd. Industrial capital Goods 3.45
Television Eighteen India Ltd. Media & Entertainment 3
Mcdowell & Company Ltd. Consumer Non Durables 2.85
Pantaloon Retail (india) Ltd. Retailing 2.8
MRF Limited Auto Ancillaries 2.54
HDFC Ltd. Finance 3.45
Infosys Technologies Ltd. Software 2.72
Alembic Ltd. Pharmacuticals 2.67
Alfa Laval (India) Ltd Industrial capital Goods 2.33
EID Parry (India) Ltd. Consumer Non Durables 2.48
Andhra Sugars Ltd Chemicals 2.27
TajGVK Hotels & Resorts Limited Hotels 2.26
Nestle India Ltd. Consumer Non Durables 2.25
Centurion Bank of Punjab Ltd. Banks 2.05
Hindalco Industries Ltd Non-Ferrous Metals 2.08
SKF India Ltd Industrial Products 1.91
Punjab National Bank Banks 1.9
ICICI Bank Ltd. Banks 1.75
Nagarjuna Construction Company Ltd Construction 2.85
Amtek Auto Ltd. Auto Ancillaries 1.82
Bajaj Auto Ltd. Auto 1.65
Britannia Industries Ltd. Consumer Non Durables 1.99
Raymond Limited Products 1.51
Apollo Tyres Ltd. Auto Ancillaries 1.43
Ugar Sugar Works Ltd Consumer Non Durables 1.43
Tata Chemicals Ltd. Fertilisers 1.66
PVR Ltd. Media & Entertainment 1.31
SREI Infrastructure & Finance Ltd Finance 1.24
Bharat Bijlee Ltd Industrial capital Goods 1.23
Nahar Industrial Enterprises Ltd. Textiles - Cotton 1.91
Siemens Ltd. Industrial capital Goods 1.29
Bharati Shipyard Ltd. Industrial capital Goods 1.96
KPIT Cummins Infosystems Ltd. Software 1.16
HCL Infosystems Ltd. Hardware 1.77

39
 % to Net
Name of the Instrument Industry/ Rating
Assets
Celebrity Fashions Ltd. Textile Products 1.98
Marico Ltd. Consumer Non Durables 1.04
Deccan Chronicle Holdings Ltd. Media & Entertainment 1.99
Indo Gulf Fertilizer Ltd. Fertilisers 1.99
Ipca Laboratories Ltd. Pharmacuticals 1.89
Texmaco Ltd. Industrial capital Goods 1.49
GVK Power & Infrastructure Ltd. Power 1.29
Sadbhav Engineering Ltd. Construction 1.39
Total 91.03 91.03
Money Market Instruments
Commercial Papers/Certificate of Deposits
Corporate Debt / Financial Institutions
Citifinancial Consumer Finance India Ltd. P1+ 0.87
Total 0.87
Collateral Borrowing & Lending Obligation 1.75
Net Current Assets/(Liabilites) 6.35
Grand Total 100.00

PRINCIPAL TAX SAVING FUND

An Open – Ended Equity Linked Saving Schemes

FUND FEATURES

Who should invest:

The Scheme is suitable for investors seeking income tax deduction
under Section 80C (2) of ITA along with long-term equity-market returns from
investment in equities.

Investment Objective :
To provide long-term growth of capital.

Liquidity:
Sale and Repurchase on a continuous basis, subject to lock-in period of 3 years.

40
Investment Options: Growth

Tax Benefits:
An investment by an Individual or a Hindu Undivided Family in the ELSS scheme
will entitle the investor to a deduction from their Gross Total Income as provided under
clause (xiii) of section 80C (2) of the Income Tax Act, 1961. The maximum deduction
permissible under this section is Rs. 100,000/- in a year, subject to availability of gross total
income of the assessee. No Gift Tax, no Wealth Tax. Please consult your own professional
advisor concerning possible tax consequences on your investment.

Fund Manager: R. Srinivasan

Assets under management: Rs.135.15 core

 NAV (As on 31 – January – 2021):
o Growth option: Rs.24.46
 NAV (As on 05 – April – 2021):
o Growth option:

PERFORMANCE:

41
SECTOR
STRATEGY:

42
PORTFOLIO:-

Instrument Industry % of NAV

BHEL Industrial Capital Goods 5.32
Reliance Industries Ltd Petroeum Products 4.95
Godrej Industries Ltd Chemicals 4.24
Maharashtra Seamless Ltd Ferrous Metals 3.99
ONGC Ltd Oil 3.36
Godrej Consumer Products Ltd Consumer Non Durables 3.28
United Breweries Holding Ltd Finance 3.26
Crompton Greaves Ltd Industrial Capital Goods 3.16
Automative Axles Ltd Auto Ancillaries 3.14
SBI Banks 3.10
Pantaloon Retail (I) Ltd Retailing 3.05
Greaves Cotton Ltd Industrial Products 3.03
Jaiprakash Associates Ltd Construction 3.01
Goodlass Nerolac Paints Ltd Consumer Non Durables 2.90
HDFC Bank Ltd Banks 2.83
Mahindra and Mahindra Ltd Auto 2.81
Omax Auto Ltd Auto Ancillaries 2.79
Blue Star Ltd Consume Durables 2.63
Jindal Steel & Power Ltd Ferrous Metals 2.58
PVR Ltd Media & Entertianment 2.51
Blue Dart Express Ltd Courier 2.29
Instrument Industry % of NAV
Kirloskar Brothers Ltd Industrial Products 2.25
Infosys Technologies Software 2.10
Rajshree Sugars & Chemicals Ltd Sugar 2.09
ABB Ltd Industrial Capital Goods 2.06
CESC Power 1.98
Hindustan Construction Company Construction 1.78
Ltd
Spice Jet Ltd Transport 1.70
Mahavir Spinning Mills Ltd Textiles - Cotton 1.58
The South Indian Bank Ltd Banks 1.55
Graphite Ltd Industrial Products 1.51
EID Parry Ltd Consumer Non Durables 1.27
Mid-day Multimedia Ltd Media & Entertianment 1.26
Reliance Natural Resources Ltd Gas 1.22
Super Sales Ltd Textiles - Cotton 1.14
Bannari Amman Sugar Ltd Consumer Non Durables 1.07
Vardhaman Spinning & General Finance 0.93
Mills
Cash, Call and Other Assets 6.28
Net Assets 100.00

43
Franklin India Taxshield

Investment Style:
The fund manager seeks steady growth by maintaining a diversified portfolio of
equities across sectors and market cap ranges.
Investment Objective:
Aims to provide medium to long term growth of capital along with income
tax rebate.
Date of Allotment: April 10, 2020
Fund Manager: Satish Ramanathan
Latest NAV:
(As on 31 – January – 18):
Growth Plan Rs. 110.51
Dividend Plan Rs. 34.85
 NAV (As on 05 – April – 18):
o Growth option: Rs.118.47

Fund Size: Rs. 236.51 crores

Turnover: Portfolio Turnover 71.48%
Standard Deviation: 6.35
R-squared: 0.92
Beta: 0.83
Sharpe Ratio*: 0.60
* Risk-free rate assumed to be 5.03% (based on JP Morgan 3 month T-Bill Index)
Expense Ratio: 2.43%
Minimum Investment/ Multiples for New Investors: Rs.500/500
Additional Investment/ Multiples for Existing Investors: Rs.500/500

Tax Benefits:
Investments will qualify for tax benefit under the new Section 80C as amended by the
Finance Act 2005

44
Fund Manager’s Commentary:
The equity exposure of the fund has increased to 94.53% from 88.71% during the
month, as we deployed the cash position. The main addition to the portfolio was Reliance
Capital. Exposure to FMCG and finance sectors has gone up, while that to software and
media has come down.

Rs.10,000 invested at inception in FIT & S&P CNX 500:

Sector Strategy:

RELIANCE TAX SAVER (ELSS) FUND

FUND DATA

Structure: Open-ended Equity Linked Savings Scheme

Inception Date: September 22, 20017
Corpus: Rs 1,196.31 crore (March 31, 2021)
Minimum Investment: Rs 500 & in multiples of Rs 500
Fund Manager: Ashwani Kumar
Entry Load: <2cr - 2.25%; =2cr <5cr - 1.25%; =5cr - Nil

45
Exit Load: Nil
 NAV (As on 31 – January – 2021):
o Growth option: Rs.13.51
 NAV (As on 05 – April – 2021):
o Growth option: Rs.13.10

INVESTMENT OBJECTIVE:

The primary objective of the scheme is to generate long-term capital appreciation

from a portfolio that is invested predominantly in equity and equity-related instruments.

46
SECTOR ALLOCATION:

%
Industry
Allocation
Auto 12.96
Industrial Capital Goods 12.39
Software 9.36
Banks 8.7
Auto Ancillaries 6.16
Cement 5.28
Consumer Non Durables 4.52
Industrial Products 4.36
Pharmaceuticals 4.22
Ferrous Metals 3.9
Textiles 3.73
Petroleum Products 3.31
Chemicals 2.4
Fertilisers 2.22
Textile Products 1.99
Power 1.74
Steel 1.39
Telecom Services 1.29
Media & Entertainment 1.1
%
Industry
Allocation
Dredging 0.89
Construction 0.72
Industrial Machinery 0.44
Retail 0.11
Engineering 0.08
Oil 0.06
Total 93.32

47
PRUICICI TAX PLAN:

 Fund Size: Rs. 242.97 crores

 NAV (As on 31-January-2021):
 Growth option: Rs. 76.27
 NAV (As on 05-April-2021):
 Growth option: Rs. 81.88
 As we know that at the inception the fund value will be Rs.10 but at this stage the
value of the fund is Rs.76.27.
 The return of the fund is 36.97% where as the bench mark of the S&P Nifty was
13.23%. According to this the fund has done better then the assumption of the market.
 NAV has been increased from rs 76.27 to Rs 81.88.

KOTAK ELSS:

 Fund Size: Rs.106.73 crores

 NAV (As on 31 – January – 2021):
o Growth option: Rs.11.586
 NAV (As on 05 – April – 2021):
o Growth option: Rs.13.72
 As we know that at the inception the fund value will be Rs.10 but at this stage the
value of the fund is Rs.11.586.
 The return of the fund is 17.90% where as the bench mark of the S&P Nifty 500 was
15.60%. According to this the fund has done better then the assumption of the market.
 NAV has been increase from Rs.11.586 to Rs.13.72

PRINCIPAL TAX SAVING FUND:

 Fund Size: Rs.135.15 crores
 NAV (As on 31 – January – 2021):
o Growth option: Rs.24.46
 NAV (As on 05 – April – 2021):
o Growth option: Rs.72

48
  As we know that at the inception the fund value will be Rs.10 but at this stage the
value of the fund is Rs.24.46.
 The return of the fund is 25.02% where as the bench mark of the S&P Nifty was
13.18%. According to this the fund has done better then the assumption of the market.
 NAV has been increased from Rs.24.46 to Rs.72

TEMPLETON INDIA TAXSHEILD:

 Fund Size: Rs.236.58 crores

 NAV (As on 31 – January – 2021):
o Growth option: Rs.110.51
 NAV (As on 05 – April – 2021):
o Growth option: Rs.118.47
 As we know that at the inception the fund value will be Rs.10 but at this stage the
value of the fund is Rs.110.51.
 The return of the fund is 71.48% where as the bench mark of the S&P Nifty 500 was
50.27%. According to this the fund has done better then the assumption of the market.
 NAV has been increased from Rs.110.51 to Rs Rs.118.47

RELIANCE TAX SAVER (ELSS) FUND:

 Fund Size: Rs.1196.31 crores

 NAV (As on 31 – January – 2021):
o Growth option: Rs.13.51
 NAV (As on 05 – April – 2021):
o Growth option: Rs.13.10
 As we know that at the inception the fund value will be Rs.10 but at this stage the
value of the fund is Rs.13.51.
 The return of the fund is 30.51% where as the bench mark of the S&P Nifty 500 was
21.07%. According to this the fund has done better then the assumption of the market.
 NAV has been decreased from Rs.13.51 to Rs.13.10

49
INTERPRETATION:

• Mutual funds outnumber traded securities.

• Mutual funds have a number of objective functions which lead to observably different
trading styles.
These styles include:
• A wide variety of firms that trade on news regarding the endowment shocks of individuals.
In the real world this might correspond to fundamental research about how various parts of
the economy are doing.
• A price fund that trades only on the equilibrium price – essentially a technical trading fund.
• A fund that simply trades a fixed amount of stock – basically an index fund.
• Adding mutual funds to the economy increases stock price volatility. This result contrasts
sharply with models where funds act like people with utility functions. In those papers
additional funds reduce volatility.
• Since many funds have demands which are completely price inelastic, the introduction of
an
additional such fund does not directly affect the risk discount in the prices of risky securities.
There may be such an effect, but it operates through a change in investors’ implied risk
aversions.
• Generally, new funds should be endowed with trading strategies which are maximally
different from those of existing funds.

50
 CHAPTER VII
RESEARCH FINDINGS &
SUGGESTIONS

51
 FINDINGS OF THE STUDY

 MAGNUM TAX GAIN has NAV of Rs. 46.98 crs. It has standard deviation 8.81% by
using sharpe ratio it has 0.58% in 2020

 HDFC TAX SAVER has NAV of Rs. 100.6 crs. It has standard deviation 8.07% by using
sharpe ratio it has 0.53% in 2021

 PRU ICICI TAX PLAN has NAV of Rs. 66.89% crs. It has standard deviation 9.87% by
using sharpe ratio it has 0.39% in 2021

 HDFC LT ADVANTAGE has NAV of Rs. 67.57% crs. It has standard deviation 7.81%
by using sharpe ratio it has 0.47% in 2020

 BIRLA EQUITY PLAN has NAV of Rs. 45.46% crs. It has standard deviation 7.95% by
using sharpe ratio it has 0.38% in2021

 TATA TAX SAVING has NAV of Rs. 31.54% crs. It has standard deviation 7.21% by
using sharpe ratio it has 0.35% in 2020

 SUNDARAM TAX SAVER has NAV of Rs. 17.94% crs. It has standard deviation
8.55% by using sharpe ratio it has 0.39% in 2021

 FRANKLIN INDIA TAX SHIELD has NAV of Rs. 88.24% crs. It has standard deviation
6.77% by using sharpe ratio it has 0.42% in 2021

Mutual funds have a number of objective functions which lead to observably different
trading styles. These styles include:

 A wide variety of firms that trade on news regarding the endowment shocks of
individuals. In the real world this might correspond to fundamental research about how
various parts of the economy are doing.

52
 A price fund that trades only on the equilibrium price – essentially a technical trading
fund.
 A fund that simply trades a fixed amount of stock – basically an index fund.
 Adding mutual funds to the economy increases stock price volatility. This result contrasts
sharply with models where funds act like people with utility functions. In those papers
additional funds reduce volatility.
 Since many funds have demands which are completely price inelastic, the introduction of
an additional such fund does not directly affect the risk discount in the prices of risky
securities. There may be such an effect, but it operates through a change in investors’
implied risk aversions.
 Generally, new funds should be endowed with trading strategies which are maximally
different from those of existing funds.

53
 SUGGESTIONS

 Kotak Mahindra are not concentrating on the advertisements that’s the

reason people don’t know the company name. according to me the company
is little bit spending on the advertisement company which will be growing
well and gain profit. They know the public awareness.

 Compared to other companies Kotak Mahindra is good growing company in

India. They covered only main big cities, towns. Company was unaware of
the rural places. They have to concentrate on those rural places. In India rural
places are available more than the cities.

 Tax planning of the part-time employee assessees, retired employee

assessees, professional assessees and business assessees

 Comparative study between Tax planning ofsalaried assessees and other

assessees

 Tax planning of Individual assessees in respect of tax on Fringe Benefits,

Bank Cash Transaction and Securities Transaction.

 Opinion ofthe Tax Consultants, Industrialists and Trade Unions in respect of

Tax Planning Options offered for various categories of assessees by the
Government of India.

54
 CHAPTER -VIII
SUGGESTIONS &
RECOMMENDATIONS

55
 SUGGESTIONS & RECOMMENDATIONS

1. By this study we conclude that the minimum Tax saving of and individual is Rs 1000
and the maximum Tax saving is 30000.

2. An Individual can take an advantage of this funds and schemes to save tax by
investing maximum of Rs 1,00,000

3. If an Individual pays a premium more than Rs 1,00,000 then he or she can’t avail tax
benefit of what he or she pays excess of Rs 1,00,

a. The conclusion of this study is that the lower risk with the higher returns is the
important aspet of the mutual funds. As we are studing on the tax saving funds
in this the two type of benefits will be enjoyed by the investor i.e., first he will
be saving the tax and the money what he is investing in that he should not pay
any type of tax.

b. In the above funds we can see that PruICICI tax plan fund had given 36.97%
of return form the inception time, Kotak ELSS fund has given the return of
17.9% in one year, the Principal Tax Saving Fud has given 25.02% of returns
form the inception period, Templeton India Tax sheild fund had given the
returns of 71.48% from the inception period and the Reliance Tax saver
(ELSS) fund had given 30.51% of return from the inception.

c. According to the NAV the Principal Tax Saving Plan Fund is well,but the
other and the competetor is Franklin Templeton Taxshield fund and KOTAK
MAHINDRA Tax Plan Fund. The fund is in the market for the long time but
also the return of the fund are well. So, the investor can invest in the Principal
Tax Saving Plan Fund or KOTAK MAHINDRA Tax Plan Fund both. Here,
the Franklin Templeton fund in the market for the long time more than the
five years and the performance of the fund is also well. The more fluctions are
not i.e., the fund is not have more up and downs in the market the fund
manager had maintained the fund in a good order and the portfolio is

56
 maintained in the well desired way and same with the KOTAK MAHINDRA
Tax Plan Fund also the investor can invest any one of the fund.Relience
Fund’s NAV has come down during this one year.So Investigate properly
before investing in Relience Tax Saver

d. While investing the main things are that has to be noted that the fluctions are
there are and how the fund is doing from the inception period. In the tax
saving scheme the main intension of the investor is to save the tax, and he
wants the money to be get some value added to it.

57
BIBLIOGRAPHY

58
 BIBLIOGRAPHY

BOOKS

1. H.Prem Raja ,2007, “Systematic Study of Income Tax”.

2. Allen, F. and D. Gale, 1989, “Optimal Security Design,” Review of Financial Studies,
1 (3), 229–263.

3. Allen, F. and G. Gorton, 1993, “Churning Bubbles,” Review of Economic Studies, 60

(4), 813-836.

4. Biais, B., T. Foucault, and F. Salanié, 1998, “Floors, Dealer Markets and Limit Order
Markets,” Journal of Financial Markets, 1, 253-284.

WEBSITES
1. www.kotak.com

2. www.kotaksecuties.com

3. www.principalindia.com

4. www.templetonindia.com

5. www.reliancemutual.com

6. www.google.com

7. www.myiris.com

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