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ELSS

Ideal
Investment
Avenues

Drashti Investments
Agenda

• About ELSS
– Key Differentiation
– Advantages
• ELSS – Comparison
• Why ELSS?
• Why Equities?
• Why India?
• Fund Manager Advantages
• Tax Planning
• Past Performance
• Current NFOs
• Summary
• About Us – Services
About ELSS

• An ELSS (Equity Linked Savings Scheme) is a mutual fund scheme that
invests in equity & equity-related securities

• ELSS are also eligible investments under section 80C of Income Tax Act
1961, where the investments up to Rs.1 Lac* is eligible for deduction from
your total income. Thus you can easily save up to Rs.33,660/- in taxes by
investing in ELSS.

• ELSS have a lock-in period of three years. This allows the investors to
benefit from the long term growth potential of equities.

* For Financial Year 2006-07
ELSS – Key Differentiation

ELSS is the only investment product that offers ….

Twin Advantages

• Equity Returns
• Tax Benefits
ELSS – A Comparison

Instrument Expected Returns Lock-In Period

National Savings Certificate - NSC 8.16% 6 years

Public Provident Fund - PPF 8.50% Up to 15 years

Mutual Fund ELSS Around 15%-20% 3 years

Investment 1 Lac End Value of Investment in Rs. Lac after - Years

Avenue Returns 3 6 8 10 15 20

NSC 8.16% 1.27 1.60 1.87 2.19 3.24 4.80

PPF 8.50% 1.28 1.63 1.92 2.26 3.40 5.11

ELSS 15.00% 1.52 2.31 3.06 4.05 8.14 16.37

Mutual Fund ELSS returns are the assumed returns dependent on the markets
and are not guaranteed or assured
Why ELSS?

• ELSS offer the following advantages over traditional tax saving investments

– Potential for higher returns
– No limits on maximum investment amount
– Lower Lock-in period

Advantages of being a Mutual Fund scheme
– Tax benefits as an Equity scheme …
• Tax free dividends
• No Long-term Capital Gains
– Choice of AMCs & Schemes and also Options (growth / dividend / reinvestment)
– Convenience / Flexibility of investing (Lump sum / SIP / Switch / STP)
Why Equities?

10,000 Equities (represented by Sensex) has
9,000 outperformed all other asset classes …
8,000 In past 27 years, BSE Sensex has delivered
approx. 20% returns yearly Sensex
7,000
6,000
5,000 Company
4,000 Deposits Bank
Deposits
3,000
2,000
Inflation
1,000 Gold
0
1990- 1991- 1992- 1993- 1994- 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 2003- 2004- 2005-
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

Equities in the long term are not risky !!!
India – Why Invest in Equities

• 9% GDP growth makes India among the fastest growing economies in the
world. India presents a fundamentals led growth story expected to keep
the pace high for at least a few decades ..

• Indian companies today are very competitive – have growing cost-
effectiveness, a confident management, global outlook & plans, etc. The
Profit growth rates are very encouraging & are expected to only continue

• As profits grow (between 15%-20%) the market would also grow at such a
rate over long term since the prices always trail the profits.

• The market valuations are now fair and stocks are not overvalued. For a
long-term investor, the opportunity to create wealth over time is great.
ELSS – Advantages to Fund Manager
Tax Planning with ELSS

You can save taxes up to Rs.33,660/- by investing the optimal amount in ELSS
schemes till 31st March for the current F.Y.

Taxable Tax before ELSS Optimal New Taxable Tax After
Savings
Income Planning Amt. Income Planning

150,000 5,100 50,000 100,000 0 5,100

300,000 40,800 100,000 200,000 15,300 25,500

500,000 102,000 100,000 400,000 71,400 30,600

900,000 224,400 100,000 800,000 193,800 30,600

1,200,000 347,820 100,000 1,100,000 314,160 33,660
Past Performance

As on 9th March 2007

ELSS Name 2 Years 3 Years 5 Years
SBI Magnum Tax Gain Fund 46.56 59.04 53.85
HDFC Taxsaver - Gr 36.5 45.81 45.49
Principal Tax Savings Fund 35.76 37.99 39.83
ING Vysya Tax Savings Fund - Gr 35.66 NA NA
Birla Sun Life Capital Tax Relief -96 Fund 35.29 26.43 34.42
Birla Equity Plan - Div 33.38 35.01 45.15
Sundaram BNP Paribas Tax Saver - Div 32.96 44.1 40.55
HDFC Long Term Advantage Fund - Gr 31.03 38.1 48.43
Franklin India Taxshield Gr 28.53 29.69 34.95
Prudential ICICI Tax Plan-Gr 28.27 44.38 43.14

ELSS – Average 31.24 36.07 40.68

NSE 50 30.8 26.21 25.99

BSE 30 (Sensex) 36.64 30.82 29.04

Mutual fund Investments are subjected to market risks. Please read the offer document carefully before
investing. Past performance may or may not be repeated in future.
ELSS: NFOs

10 year close ended Equity Linked Saving Scheme
(3 year lock in)
Long Term December 21, 06 -
Advantage Fund March 20, 07 80-100% Equity and equity related instruments
0-20% Debt, Money market instruments & Securitized
debt
3 year close ended Equity Linked Saving Scheme
JM Equity Tax December 28, 06 -
80-100% Equity and equity related instruments
Saver-Series I March 29, 07
0-20% Debt, Money market instruments & Securitized
debt
Summary

• India is among the most attractive investment options. Don’t miss the bus !!!

• Treat long-term wealth creation as a primary objective. Treat tax savings as
additional / bonus.

• Invest before 31st March !!!!
About Us

• Drashti Investments is a financial supermarket which offers you more than 600
mutual fund schemes, Unit Linked Insurance Plan (ULIP),
life Insurance, Initial Public Issues, RBI Bonds, New Fund Offers of Mutual Funds
and other tax-saving and investment instruments.

• We will also assist you in Tax Planning and Financial Planning.

• We are a part of NJ Fundz Network, India’s leading advisors & distributors of mutual
funds. NJ is a premium network of Financial Advisors.

• As a client of ours, you would have access to one of the best online investment
accounts that are updated on a daily basis and would give you consolidated
valuations & other reports for All Mutual Funds – All Schemes
About Us - Services

Services Investment Advisory Plan for

Financial Planning Wealth Creation Child Education

Investment Advisory Regular Income Child Marriage

Portfolio Management Capital Protection Retirement

Financial Product Distribution Any Mix of Above Comprehensive Planning
Happy Investing

Drashti Investments
E-mail : drashti.investments @rediffmail.com