ELSS (Equity Linked Saving Scheme) General Discussions

[GlobalGyan]

Hi,

I am a new member and new to investments. First thanks for this great forum!

I am planning to invest some amount in mutual funds primarily to save tax. I have a PPF account, but wish to make an 80-20 investment in PPF and mutual funds.

Reading the wonderful posts here have cleared many questions, but one remains:- If I invest say 10,000 in MF Tax saving fund , I understand that there is lock in period of 3 years. For the next year, if I invest 10,000 in the same account then will it take another 3 years for me to get the returns?

-Krishna

[pnbalaji]

Hi,

I don't think you can invest Rs 10,000 into the same account. Instead you need to buy another mutual fund for Rs 10,000 and that will be locked for 3 years (as of now).

One more news:- A week or 10 days back, I saw a news in Hindu where tax rebate on ELSS is going to change. From next year onwards, tax rebates are applicable to only close-ended ELSS funds and the lock-in is going to be 10 years. If that is the case, I may not go for the tax saving ELSS from next year.

Thanks,
Balaji.

[pravise]

Hi Traderji,
I need your valuable advice on what are the MF schemes that are tax excempted and which ones are good for buying currently.

Is it good to invest on SBI Magnum Tax Fund, and Franklin Templeton Taxshield (Dividend/Growth), HDFC tax funds for this purpose?

Where can i find a list of tax advantage funds ?

Thanks & Regards,
PRavise.

[vneil]

Originally Posted by pravise

Hi Traderji,
I need your valuable advice on what are the MF schemes that are tax excempted and which ones are good for buying currently.

Is it good to invest on SBI Magnum Tax Fund, and Franklin Templeton Taxshield (Dividend/Growth), HDFC tax funds for this purpose?

Where can i find a list of tax advantage funds ?

Thanks & Regards,
PRavise.

All ELSS mutual funds are exempt under Section 88, both closed as well as open. All things being equal, try for something from Franklin/ SBI. They both give decent returns. As of now there is a site called www.personalfn.com, which is a paid site. However NAV alerts are free. The other decent site for mutual funds is www.moneycontrol.com (go to the mutual fund tab).

Trust that this is enough for you to start with.

[pravise]

Thanks Neil.

If i buy the MFs thru ICICIdirect, how soon can i expect to get the investment proof documents since i have to file it to my company for current year's tax proofs(i have only one week)...any idea?

Appreciate suggestions.

[adilsaleem]

Hi
I am very new to mutual funds , got to know a little about it. as far as i understand there is a deduction of upto 1 lakh if we invest in mutual funds. Am i correct? Also i am not sure as to how it works. For example if i have a taxable income of Rs 1 lakh 60 thousand and i invest Rs 5000 per month in a tax saving mutual fund ie 60 thousand a year will this entire 60 thousand be exempt ? Also if some one could advice me on some good tax saving mutual funds. I have short listed the following

- Sundaram tax saver
- sbi tax saver
- hdfc tax saver

Please Please do help me

Regards
Adil Saleem

[ppatodia]

I suggest the following site - www.etaxesindia.com
they have all the answers you need and can help you plan your taxes in a more financially efficient way

[aca_trader]

Originally Posted by adilsaleem

Hi
I am very new to mutual funds , got to know a little about it. as far as i understand there is a deduction of upto 1 lakh if we invest in mutual funds. Am i correct? Also i am not sure as to how it works. For example if i have a taxable income of Rs 1 lakh 60 thousand and i invest Rs 5000 per month in a tax saving mutual fund ie 60 thousand a year will this entire 60 thousand be exempt ? Also if some one could advice me on some good tax saving mutual funds. I have short listed the following

- Sundaram tax saver
- sbi tax saver
- hdfc tax saver

Please Please do help me

Regards
Adil Saleem

Dear Adil,

One gets deduction u/s. 80C only if he invests in an ELSS of a MF. Hence, if you invest in ELSS you will get exemption to the extent of Rs. 1 lac. Thus, you will certainly get a deduction of Rs. 60K for the given example. A caveat with ELSS is that money is blocked for 3 years. Given the Long Bull Run seen in the past 4 years, MF returns over a period of 3 years from now might not be as exciting as they are today.

On deciding about which MF is good for investment, one should look for the fund manager and his history. Usually, people go for past returns but the better way to judge is to see the volatility of the past returns. While past returns in itself is no gurantee of future returns, the volatility of past returns may indicate that the returns will be volatile in future as well.

Best Regards,
--Ashish

[adilsaleem]

Thanks Ashish , looking for a few more comments from seniors. Also i would like to know if i could directly invest in equity and get a tax benefit

[aca_trader]

Originally Posted by adilsaleem

Thanks Ashish , looking for a few more comments from seniors. Also i would like to know if i could directly invest in equity and get a tax benefit

Well, You can't get any tax benefit by directly investing in Equity.