By Ashish Kyal –
As the Financial year comes to an end, everyone search for the activity of “tax-saving”. In an effort to cut the tax liability by as much possible, some of us end-up making investment decision. Sometime it would be for long-term perspective.
Many people invest in Mutual fund for long-term with a tax saving motive. Funds like Equity Linked Saving Scheme (ELSS) provide tax relief to the investors. Dividend declared to investors of ELSS can avail rebate under section 88 of the Income Tax Act, 1961. ELSS funds are one of the best avenues to save tax. This is because along with the tax deduction, the investor also gets the opportunity of investing in equity markets. Also, no tax is imposed on the long-term capital gains from these funds. Moreover, compared to other tax saving options, ELSS has the shortest lock-in period of three years and it is handled by professionals which is a cherry on the cake.
Birla Sun Life Tax Relief 96 – Growth Weekly Chart
Birla Sun Life Tax Relief 96 is an open ended Equity Linked Saving Scheme (ELSS) with 99.77% exposure to equity
Portfolio Analysis: The fund aims to generate returns by investing in complete equity with maximum exposure to Banking/Finance and Automotive sector.
Risk Profile: This fund is considered as “High Risk Fund” due to complete exposure to equity instruments, therefore it’s suitable for investors who are looking for Tax benefits.
Taxation Perspective: Birla Sun Life Tax Relief 96 is ELSS fund is where investor is eligible for tax exemptions up to 150,000 INR under section (u/s) 80C of the Indian Income Tax Act, 1961 if they stay invested for three years or more. ELSS Funds are also eligible for Long Term Capital Gains which will be treated tax free as the holding will be more than one year. The Dividend earned from ELSS funds is also treated as tax free.
Investment Rationale: Birla Sun Life Tax Relief 96 fund has shown some underperformance as currently Equity market is going through consolidation in the form of sideways to negative action. We can expect the same in this fund to continue for next few weeks but once the correction is complete next strong bull trend should start on upside!
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