ELSS Investment is an Ideal Investment

8/14/2019 ELSS Investment is an Ideal Investment

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Tax Saving Options


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Agenda

Options available for tax saving investment.

Why ELSS scores over traditional options.

Performance of ELSS schemes.

Conclusion.


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Section 88 was scrapped and 80 C was introducedin finance bill 2005.

Instead of offering tax rebates, investment underSection 80 C qualifies for deduction from gross

total income. Sectoral investment cap has been removed under

Section 80 C as was the case under Section 88.

This allows investor to invest as per his/her risk

profile.

Section 80 C


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Options Available under Section 80 C

Apart from these, insurance premium on life insurancepolicies and principal component of housing loan are also

eligible for Section 80 C benefit.

Investment Avenue % ReturnMinimum

Investment

Maximum

Investment

Lock In Period Feature

National Saving

Certificate8 100 No Limit 6 Years Interest is taxable

Public Provident Fund 8 Rs500 Rs.70,000 15 Years Tax Free Return

Time Deposit 6.25-7.5 Rs200 No Limit5 Years (to avail

80C benefit)Interest is taxable

Senior Citizen Saving

Scheme 9 Rs1000 Rs15 lakh

5 Years (to avail

80C benefit)

minimum age is 55 to

avail this option.

Bank F.D. 9 - No Limit5 Years (to avail

80C benefit)Interest is taxable

Equity Linked Saving

Scheme

market driven

but one can

expect 15-17%

return.

Rs.500 to

Rs.5000No Limit 3 Years

Lowest lock in period

with maximum possible

return.


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Are You One of Those Who Still Go for Traditional

Instruments like Bank F.D. and PPF?

OR

Smart Enough to Take Dual Advantage of Low

Valuations and Tax Benefit by Investing in ELSS.


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Lets Take a Case Study to help you in

Decision making.

Mr. Ram prefers investing Rs.70000 in PPF to

earn secured return. He has invested this amount

of 31st March of every year since 1996.

Mr. Shyam has invested Rs.70000 every year on31st March in ELSS scheme (Birla Sunlife Tax

Relief 96) since 1996.

Both have invested Rs.9.1 lacs till 31st March

2008.


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Who has taken Wise Decision?

Stock markets are down by 60% in 2008

from 21000 to 9000.

Mr. Ram feels proud on his decision of not

investing in ELSS and choosing PPF.

So you will also agree with Mr. Ram as PPF has given

Him fixed return of 8% over the years.

But Is It Really a Smart Decision?


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Performance Scorecard

Scheme Name 5 Years 7 Years 10 Years 12 Years

Birla Sun Life Tax Relief -96 Fund 14.46 23.21 27.22 30.85Franklin India Taxshield Gr 20.13 26.37 NA NA

HDFC Long Term Advantage Fund - 21.48 31.76 NA NA

HDFC Taxsaver - Gr 24.19 30.33 NA NA

ICICI Prudential Tax Plan-Gr 18.78 28.4 NA NA

SBI Magnum Tax Gain Fund - Div 31.45 34.73 25.14 21.83

Bank F.D. 9

PPF 8 8 8 8

Index Name 5 Years 7 Years 10 Years 12 Years

BSE 200 13.23 20.42 12.34 10.66

BSE 30 (SENSEX) 14.79 18.11 13.28 9.91

BSE 500 NA NA NA NA

CNX Midcap 20.94 29.74 NA NA

NSE 50 13.13 16.39 13.4 10.12

NSE 500 12.79 19.68 14.71 11.45

Schemewise Performance as on 31st Oct 2008

Market Index Performance

ELSS Schemes have clearly outperformed not only traditionaloptions but also broader indices.

Returns as on 31.10.08


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Solid SIP Returns.

Schemewise SIP Return as on 31st Oct 2008 7 Years 10 Years 12 Years

Birla Sun Life Tax Relief -96 Fund 13.46 17.37 24.20

Franklin India Taxshield Gr 18.96 N.A. N.A.

HDFC Long Term Advantage Fund - Gr 21.19 N.A. N.A.

HDFC Taxsaver - Gr 23.28 N.A. N.A.

ICICI Prudential Tax Plan-Gr 19.51 N.A. N.A.

SBI Magnum Tax Gain Fund - Div 29.84 23.72 23.29Sundaram BNP Paribas Tax Saver-Div 24.61 N.A. N.A.

SIP is assumed on 10th of every month.

ELSS funds have solid track record of consistence performance.


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ELSS : Effective way of saving taxes.

30,900180,250211,1501,000,000

30,90092,700123,600750,000

20,60036,05056,650500,000

10,3005,15015,450300,000

5,15005,150200,000

You saveTax w ith ELSSTax w ithout ELSSYour earning

Amount in Rs.

Based on Tax Slab for FY 08-09

Assuming an investment of Rs. 100,000 in ELSS in this Financial Year


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Operational Efficiency.

ELSS scores over other options as it comes withlowest lock in period of just three years.

Very easy to operate as it requires only PAN cardon part of investor.

Investment can be get done just by signing anapplication form and cheque.

It is one of the most transparent of all the optionsavailable as portfolio of the scheme gets published

on a monthly basis.


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It provides opportunity to create wealth in

long term which allows investor to combine

tax saving with wealth creation objective.

The only option that can beat inflation by

wide margin in long term return.

Conclusion.


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So BE Wise by Taking Wise Decision of Choosing

ELSS and make Tax Saving a Step Toward Wealth Creation.


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For Details Contact:

Ms Ami Chitral ShahM: 9869424869 email id : [email protected]

Documents

ELSS Investment is an Ideal Investment