Among
the various tax saving products which gain popularity and achieve
maximum sale in last financial quarter is the Equity Linked Saving
Scheme (ELSS). ELSS is like any regular open ended equity mutual
fund with an additional feature of tax saving under sec 80C of IT ACT
1961. However, unlike other equity funds it has a lock in period of
three years.
Some
of attractive features which makes it an interesting product for
investment is :
- Only investment avenue in 80C with an exposure in equities except the market linked ULIPS.
- As compared to other tax saving avenues, it has lowest lock in period.
- The investment in ELSS can be made both in SIPs or in lump sum mode as per our suitability.
- The returns also vary and can be high over conventional debt and small saving schemes.
- If the senior citizen falls under taxable income slab, he can invest his money in ELSS dividend mode. Although this could depend on his risk appetite.
The
selection of ELSS scheme should be based on past performance of
at least 3 years of scheme. (matching to its lock in period). Also, if
an investment is made in any NFO it is wise to check the past
performance of the fund manager and the corpus managed by him.
As
on 2 March 2016, the following ELSS are the top performing funds
Fund Name
|
3 year return
|
5 year retun
|
Net asset value
(Rs in crore)
|
Axis Long Term
Equity Fund
|
24.91%
|
18.45%
|
6886
|
Birla Sun Life
Tax Relief 96
|
20.75%
|
12.68%
|
1928
|
Reliance Tax
Saver Fund
|
20.18%
|
14.42%
|
4289
|
(Source:
www.valueresearchonline.com)
Although,
financial planning does not advise last minute investments, we shared
the above information to make mistake of wrong investment less
grave.For any other information contact us at saarthifp@gmail.com
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