If Tax Saving is a priority….

By Rahul Pithadia - Why choose ELSS is the question which comes in the mind of an individual for now as there is an obstacle of a 3 year Lock-in period. But they are unaware of the basic returns they actually fetch 150,000 INR under section (u/s) 80C without taking the fund performance into consideration. If the fund also meets the expectation of the investor then that is a cherry on the cake.

 Tax saving Mutual Fund:

ELSS funds have the lowest Lock-in-Period amongst all the categories of Section 80C which is 3 years and investors qualify for tax benefits under section 80C of Income Tax Act, 1961. This is the reason we have included this Tax relief fund.

Birla Sun Life Tax Relief 96 – Growth Weekly Chart

Birla Sun Life Tax Relief 96 20160304

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. The fund has diversified its holdings into 50 stocks with 26.38% concentration into top 5 stock holdings which is shown below:

Top holdings, sector and returns 20160304

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!


Save and Invest your Tax Savings Right Here and Right Now by getting User Friendly Online Services and Expert Advice  –   Here

Recommended Posts