What are ELSS Funds?
ELSS (Equity Linked Savings Schemes) are equity oriented mutual funds offering tax benefits under Section 80C. ELSS products stand out among all the other tax saving options, given its higher equity exposure and hence the potential for superior Wealth Creation in addition to the taxation benefits.
How much Tax can I save by investing in ELSS funds?
You can save tax upto Rs. 46,350 per year by investing in ELSS funds subject to the following:
Individual and HUF having taxable income of less than Rs. 1 crore can invest upto Rs. 1.5 lakhs under the ELSS scheme during the FY 2016-17 as per provision of Section 80C of the Income Tax Act 1961 (Includes applicable cess). Tax saving will be proportionately reduced subject to the taxable income and investments.
Further, Investment in ELSS schemes is subject to lock in period of 3 years from the date of allotment of units. The tax benefits are as per the current income tax laws and rules. Investors are advised to consult their tax advisor before investing in such schemes.
How has Reliance Tax Saver (ELSS) Fund performed?
Since its inception on 21 September 2005, Reliance Tax Saver (ELSS) Fund has given a CAGR return of 15% p.a. (as on 30 November 2016) Rs 1 lakh invested at the time of inception is worth Rs 4.85 lakh in the scheme compared to Rs 3.24 lakh in the Benchmark.
What are the USPs of Reliance Tax Saver (ELSS) Fund and why should I invest in the same?
- Track record of over 11 years
- Fund endeavours to generate sustained long term alpha
- Portfolio offers optimal mix of cyclical & defensive themes.
- Tax benefit as per Section 80C
- Regular cash flow through dividends (The scheme has given a dividend of Rs. 13.86 per unit on the face value of Rs. 10 per unit, since inception. The scheme has given 16 dividends in last 15 quarters.)
What is the current investment philosophy of Reliance Tax Saver (ELSS) Fund?
- Seeks to maintain balance between large cap companies and mid cap companies.
- Endeavors to invest in potential leaders.
- Invest in companies with potential of high growth prospects over medium term (2-3 years).
- Generally, the fund has two or three sector calls at a time. They are mostly in-line of emerging market trends.
- Small percentage of portfolio is invested in contrarian calls.
- Significant percent of outstanding equity of the scheme is invested in high conviction mid-cap companies.
- Significant allocation/exposure is taken in Multinational Companies (MNCs).
- Attempt to have a balanced portfolio on a macro basis, allocating to themes like Domestic, Consumption and Defensive.
For more details, refer to the following link: https://www.reliancemutual.com/campaigns/RelianceTaxSaverFund/product.html
Note: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.