Prajna Capital |
| Posted: 30 Jan 2015 04:05 AM PST
ELSS funds are the showstopper this year, scoring 28 out of 30 points. Being equity schemes, they are low on safety, but score full points on all other parameters. The returns are high, the income is tax-free, the investor is free to alter the time and amount of investment, the lock in period of three years is the shortest among tax-saving investments and the cost is only 2-2.5% a year. The liquidity is even higher if you opt for the dividend option, and cost is even lower if you go for the direct plans of these funds. Don't look at ELSS funds as one broad category. Within these, there are schemes with a large-cap orientation, making them more stable than others. Some have a midcap skew, which can be riskier than large cap funds but also have greater potential. The funds that have lined their portfolios with small and mid-cap stocks will be riskier, but can outperform by miles if the small-caps turn out to be multi baggers. The Reliance Tax Saver fund has almost 70% of its portfolio in small and mid-cap stocks. It has outperformed the category in the past three years, churning out 41% returns when the category average is 27.7%. Most of these returns have been generated in the past 16 months. Between December 2011 and August 2013, Reliance Tax Saver was just another tax-saving fund with an annualised return of 9%. Since then, it has shot up 93%, compared to the 55% rise in the average ELSS fund. Invest in such turbo-charged schemes if you want high returns but beware of the gut wrenching volatility. Investors seeking stability can opt for large-cap funds, such as Franklin In dia Taxshield, ICICI Prudential Tax Plan and Axis Long Term Equity Fund. These move in line with the broader market and can be part of the core equity portfolio. A few caveats here. While ELSS funds have generated spectacular returns in the past few years, tone down your expectations in the coming years. Equity schemes do well when the market rallies, but suffer when the bears return. These can carry a slightly higher risk because the exit route is blocked. Once you invest, you cannot withdraw your money before the lock-in period of three years. This is why you should have an investment horizon that is longer than this. Equities can be slightly risky over a three-year term as one business cycle takes 2-3 years to play out. So, in three years, one can get caught on the wrong side of the cycle. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015
1.ICICI Prudential Tax Plan 2.Reliance Tax Saver (ELSS) Fund 3.HDFC TaxSaver 4.DSP BlackRock Tax Saver Fund 5.Religare Tax Plan 6.Franklin India TaxShield 7.Canara Robeco Equity Tax Saver 8.IDFC Tax Advantage (ELSS) Fund 9.Axis Tax Saver Fund 10.BNP Paribas Long Term Equity Fund
You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds
Invest in Tax Saver Mutual Funds Online - For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs |
| Posted: 30 Jan 2015 03:19 AM PST
The Senior Citizens' Saving Scheme (SCSS) is an ideal tax-saving option for senior citizens above 60. The money is safe, while the returns and liquidity are reasonably good. There is an investment limit of `15 lakh but it is sufficiently high. However, the interest income from the scheme is fully taxable. The other problem is that even if you have a large amount to invest, the maximum deduction will be `1.5 lakh a year. You can stagger your investments across 2-3 financial years to make full use of the deduction under Section 80C. You can open an SCSS account in a post office or designated branches of public-sector banks. The interest is linked to the government bond yield. It is 1 percentage point higher than the 5-year government bond yield. Unlike the PPF, the rate remains unchanged till maturity. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015
1.ICICI Prudential Tax Plan 2.Reliance Tax Saver (ELSS) Fund 3.HDFC TaxSaver 4.DSP BlackRock Tax Saver Fund 5.Religare Tax Plan 6.Franklin India TaxShield 7.Canara Robeco Equity Tax Saver 8.IDFC Tax Advantage (ELSS) Fund 9.Axis Tax Saver Fund 10.BNP Paribas Long Term Equity Fund
You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds
Invest in Tax Saver Mutual Funds Online - For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs |
| Posted: 30 Jan 2015 02:06 AM PST
Investors love the PPF because they get a tax deduction on the amount they invest. There is no tax on the interest earned and withdrawals are also tax-free. The only glitch is the annual investment limit, which has now been hiked. However, another instrument gives almost the same returns and tax benefits without imposing any investment limit. Salaried taxpayers who are covered by the Employees' Provident Fund can put more than the mandatory 12% of this basic in the Voluntary Provident Fund (VPF). The VPF is an ideal saving instrument for high-income earners looking to build a tax free corpus. Unlike the PPF, there is no limit on how much you can invest. The contributions to the VPF are eligible for tax benefits that the Provident Fund enjoys. They also earn the same interest (8.75% for 2014-15). Unlike the PPF, its returns are not linked to the market but decided by the Central Board of Trustees of the Employee Provident Fund Organisation in consultation with the government. However, the VPF scores low on liquidity. You can't access money till you retire. A one-time withdrawal is allowed in special circumstances--medical emergency, purchase or construction of a house, or a child's marriage. As with EPF, money withdrawn within five years of joining service at tracts tax at the applicable marginal rate. For some taxpayers, this may not be an option now. Typically, employees have to inform their employers about deducting VPF at the beginning of the financial year. If you have opted for the deduction, you can't discontinue till the end of the financial year. Experts advise this option to those nearing retirement and face a shortfall. Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015
1.ICICI Prudential Tax Plan 2.Reliance Tax Saver (ELSS) Fund 3.HDFC TaxSaver 4.DSP BlackRock Tax Saver Fund 5.Religare Tax Plan 6.Franklin India TaxShield 7.Canara Robeco Equity Tax Saver 8.IDFC Tax Advantage (ELSS) Fund 9.Axis Tax Saver Fund 10.BNP Paribas Long Term Equity Fund
You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds
Invest in Tax Saver Mutual Funds Online - For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Download Mutual Fund Application Forms from all AMCs |
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