What Makes Equity Linked Saving Schemes A Better Option Than Other Saving Instruments?

The answer is really very simple. When you invest in ELSS mutual funds, you not only save the amount permissible by the government, you also stand to gain from it, because of the high rate of return.

There are, of course, many reasons why you should go the ELSS way.

• The returns are really very good – the year ending 2005 saw ELSS as the best performing in the mutual fund category, showing returns of nearly 60%. In fact, a number of funds have appreciated by more than 80% in their three-year period. However, though in the past few years things have not been so good due to the economic downturn and recession effects, remember equities are long term investments that yield better in the long run ( a span of 10-12 yrs)
• These funds have a lock-in period of three years, which prevents you from unnecessary withdrawals and spending and helps earn a return over time. However, remember to stay invested for longer periods of time to the tune of 10-12 years to reap the best of returns.
• Also, the lock in gives fund managers the freedom to take sector and stock bets, which they are not able to do in the regular equity schemes.
• The dividends you earn will be tax free.
• When you sell the units of these funds, you can avail of the long-term capital gain for which there is no tax. If you sell after one year, you pay no tax. 

Invest in Equity Linked Saving Schemes Online or Download Equity Linked Saving Schemes Application Form Below

Invest in Tax Saver Mutual Funds

Fidelity Tax Advantage - Very Good Tax Saving Mutual Fund

This is one of the two tax saving funds (out of 37) fall in the large-cap space. Its highly investors better than its peers during market down turns. Since its launch, of the total of eight quarters in which its category has been in the red, the fund outperformed its peers in all these. On the flip side, one has to deal with middling performance during market run-ups.

The fund has no restrictions in term so market-cap, sector or thematic bias. The focus is on bottom-up stock picking. However, the portfolio isbiasedtowardslarge-capsandclearlytowardsfinancialservices.Thedecision to buy or sell a stock is made on the basis of the fund manager's understanding of the growth outlook, fundamentals and valuations.
 
Fundmanager, Sandeep Kothari goes by the balance sheet more than what the market is chasing. So, not surprisingly 17 of his holdings have been in the portfolio almost since inception. Despite a large-cap bias, the portfolio is highly diversified. A part from Reliance Industries, allocation to a single stock has rarely exceeded six per cent of the portfolio. However, the fund takes numeroussmallbets.InDecember2010,as manyas28stocksaccountedforlessthan one per cent of the funds portfolio. The large-cap bias does not make it a very exciting offering. It does give stability but the concentrated sector bets, could hinder performance if they do not deliver.

Invest in Fidelity Tax Advantage Online or Fidelity Tax Advantage Application Form Below

Invest in Tax Saver Mutual Funds

Union KBC Taxsaver - A New Tax Saving Mutual Fund

Union KBC Mutual Fund has launched the Union KBC Taxsaver, an equity linked savings scheme (ELSS). This is the second offering from the fund house in equity funds space.
The scheme is an open-ended scheme that aims to generate income and longterm capital appreciation by investing in a portfolio of equity and equity-related securities. Under section 80C of the Income-Tax Act, investors can claim tax deductions on investments up to . 1 lakh in the scheme. The investments in this scheme are locked in for three years from the date of allotment of units.

The fund can invest 80% to 100%of the money in equity and equity-related instruments and up to 20% in debt and money market instruments. The investment team shall follow an active strategy to manage the assets of the fund keeping in mind the composition and performance of the benchmark. The BSE 100, a fairly diversified index, will be the benchmark for the scheme.

Ashish Ranawade will be the fund manager. A combination of bottom-up and top-down approaches will be used while making investments for the scheme. The minimum investment in the scheme is . 500 and in multiples of Rs 500. It also offers the systematic investment plan option. There is no entry load or exit load. First-time mutual fund investors investing more than Rs 10,000 will be charged Rs 150 towards transaction cost. Investments of over Rs 10,000 will also attract a transaction charge of Rs 100. You can choose between the growth and dividend options. The NFO closes on December 16 and the scheme will re-open for investment on December 23.
You can consider them scheme if you are looking to invest in equities with a long-term view and want capital appreciation along with tax-savings.

The scheme invests in equities and that adds to the risk of an investor's portfolio. The scheme invests in equities and that adds to the risk in investor's portfolio. Also, there are other taxes saving schemes with proven track record.

Invest in Tax Saver Mutual Funds