    Equity-Linked Savings Schemes are by far the most exciting of all the tax-saving schemes. High Returns Tax benefits The catch in this financial product is that if the returns are high. . so are the risks.

Twin Advantages • Equity Returns • Tax Benefits .

00% 1.80 5.52 1.Instrument National Savings Certificate .28 1.06 2.26 4.14 4.27 1.31 1.63 2.NSC Public Provident Fund .19 2.05 3.24 3.50% 15.60 1.16% 8.PPF Mutual Fund ELSS Expected Returns 8. Lac after .37 .92 3.87 1.11 16.Years 6 8 10 15 20 NSC PPF ELSS 8.16% 8.40 8.50% Around 15%-20% Lock-In Period 6 years Up to 15 years 3 years Investment Avenue 1 Lac Returns 3 End Value of Investment in Rs.

 An ELSS has a lock-in period of three years. varying from zero to 2. dividend and dividend reinvestment.5%.   Investing in ELSS attracts entry and exit load.000. . According to your risk appetite there are three options available to choose from: growth.5%. Every fund house has a different load factor. Exit load may be in the range of 1% to 1. which entails a minimum investment of Rs 5.

Also. the dividend distributed does not attract dividend distribution tax. In addition to this.    Investors making investments in tax saving mutual funds can avail of a deduction of up to Rs 1 lakh under Section 88 from the gross total income. The tax benefit is 33% if the gross taxable income comes in the highest income tax bracket of 30%. the capital appreciation you get on your investment will be totally tax-free after one year. .

Who can subscribe? Individuals.000 to claim an income  Tax rebate of 20 per cent. Hindu Undivided Families (HUFs) and companies. Open-ended mutual funds have no maturity period. the minimum lock-in period is three years. to claim tax rebate under Section 88.  Nomination. However.  Maturity period and returns.  Are the units transferable? The units can be easily transferred by filling out a transfer form.  Investment limit.  Where can you apply? Various mutual funds. Nomination facility is available with ELSS.  . A maximum investment of Rs 10.

Tax benefits. the units can be sold anytime after the initial lock-in period of three years. Equity funds (schemes that invest 50 per cent of their funds in equity) are also exempt from dividend tax.   . at 10 per cent or 20 per cent. Withdrawal. The difference between the selling price and the cost price is taxable as capital gains in the year of sale.000 in a financial year. the units can be sold only on the due date specified. In the case of open-ended schemes. In the case of closed-end schemes. Dividends from mutual funds are fully exempt from income tax under Section 10(33). ELSSs offer under section 88 tax rebate on investments up to Rs 10. depending on whether or not you claim indexation benefits.

Pluses  Possibility of high returns  Lock-in period of only three years  Easy transfer  Low tax incidence (10 per cent) on redemption  Efficient service. especially in the case of private mutual funds Minuses  High risk  Difficult to choose the right fund .

Growth ING Tax Saving Fund .Growth DWS Tax Saving Fund .Growth Franklin India Tax shield .Growth ICICI Prudential Taxplan .Growth SBI Magnum Tax Gain Scheme 93 .Growth Reliance Tax Saver Fund .PRINCIPAL Tax Savings Fund Principal Personal TaxSaver Birla Sun Life Tax Relief 96 Kotak TaxSaver .Growth ABN AMRO Tax Advantage Plan .Growth Birla Equity Plan .Growth Sundaram BNP Paribas TaxSaver (Open Ended Fund) .Growth Tata Tax Saving Fund HDFC TaxSaver .Growth HDFC Long Term Advantage Fund .Growth [Ranking Source: ICRA Mutual Fund Award]                    .Growth Fidelity Tax Advantage Fund .Growth UTI Equity Tax Savings Plan .


000 1.000 5.000 100.400 193.660/.000 200.660 .000 0 15.000 100.000 1.100 25.160 5.000 400.300 71.800 102.000 investing the optimal amount in ELSS schemes till 31st March for the current F.000 500.200.33.000 100.820 50. Taxable Income Tax before Planning ELSS Optimal Amt.500 30.000 300.100 40.600 33.000 224.000 900.000 800.600 30.100.000 100.Y.800 314. New Taxable Income Tax After Planning Savings 150.400 347.You can save taxes up to Rs.

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