I compared ELSS (Equity Linked Saving Scheme) mutual funds on the basis of their AUM (assets under management) size and past performance in 6 months, 1 year, 2 years and 3 years.
Finally following funds were found to be good.
Canara Robeco Equity Tax Saver, Sundaram BNP Paribas Taxsaver, HDFC Taxsaver, SBI Magnum Tax Gain Scheme 93 – Dividend, Franklin India Taxshield – Growth, DSPBR Tax Saver, Fidelity Tax Advantage
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Thanx.
In the starting of this month i started a sip rs.3000 for next 6 month in reliance elss. Now i want to invest in sip of elss hdfc. Is it right
@S.K.
Yes, HDFC Tax saver is better than Reliance tax saving Mutual fund.
I want to invest in two ELSS Funds for Rs. 15,000 each.Suggest me two good funds except HDFC Tax Saver.
@Sudip
You can choose among Canara Robeco Equity Tax Saver, Franklin India Taxshield – Growth, DSPBR Tax Saver and Fidelity Tax Advantage.
Hi I’m planning to invest 30K in tax saver mutual fund. I would like to put 10k each in 3 diffrent tax saver fund. Please suggest me that is well trusted in the market.
@Nagarajan
Its better that you invest through SIP as markets are on high as of now and there might be a correction soon.
You can choose among: Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield – Growth, DSPBR Tax Saver and Fidelity Tax Advantage
hi i am prabhu i have made 1lac saving i want invest in infrastructure bond for tax saving can u pleas suggest which one is better.
regards
prabhu
@Prabhu
Wait for LIC to launch bonds, they might come up with better interest rates than IDFC and L&T.
Thanks Pankaj. We have seen the correction today in the market. My enquiry was purely based on tax saving for this financial year. I had already invested 20k in IDFC infra bond. After paying my LIC premium and taking account of my PF contribution I still need to put in 30k for the tax saving purpose for this year. I can think of doing the SIP way from next FY. Please suggest what I can do for tax saving this year? Also what are the risk factors in putting your money in DEBT markets? Is my CAPITAL guaranteed? Is it better than FDs? Thanks in advance!
@Nagarajan
There are still 5 months in this financial year. You may start a SIP for 6 months (for 6000 per month), that should distribute the cost of buying.
Issue with investing in lump-sum is that, its difficult to time the market.
Debt funds are safe and there are positive returns on them. Its low risk and low gain. They are better than fixed deposit in tax-ability. Dividends earned are tax free. Short term gains (kept for less than one year) are added to income and taxed at same tax slab. And long term gains (kept for more than one year) are taxed at 10% without indexation and 20% with indexation.
Whereas fixed deposit gains are always added to income and taxed at same rate.
Awesome Pankaj…. so which fund shud I put thru SIP for the next six months?(for 6000 per month) and how to put on DEBT funds….. how can I get these arranged? Regards
@Nagarajan
You can choose to invest among Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver, Fidelity Tax Advantage and Sundaram BNP Paribas Taxsaver
@Nagarajan
Regarding how to invest in Debt, Please read some other posts on blog: http://www.pankajbatra.com/category/finance/mutual-funds-finance/
and since there could be further corrections, is it safe to go with DEBT funds for the current FY and think about the SIP from next FY onwards?Thanks in advance
@Nagarajan
Investment in debt funds is not allowed for tax saving.
For tax saving, Only ELSS Mutual funds (Equity linked) are allowed.
Thanks a TON Pankaj for patiently answering all my questions. I would certainly recommend all my friends to approach you for their clarifying their doubts and get expert advise. Regards
@Nagarajan
Thanks for appreciation 🙂
Spread the knowledge and awareness and it will be a completely different world.
Hi Panjak
Thanks for sharing the knowledge. Well but I have one query. I started investing in ELSS through SIP from 25-Jan-2008 till 25-12-2008. So when I will get the amount back on my investment. Will it be each month or lumpsum and when. I’m confused on this.
@Yogesh
Each unit of mutual fund purchased has 3 year lock-in.
Lets say you bought 10 units on 25-Jan-2008 and 8 units on 25-Feb-2008, then you can only sell 10 units on or after 26-Jan-2011 and more 9 on or after 26-feb-2011.
Moreover you won’t any amount back automatically, you have to redeem units to get money back. You may also choose to stay invested for even later.
hey thnx mate for clearing the doubt. you are doing wonderful job,keep it up. Best wishes.
@Yogesh
Thanks for appreciation.
Hi Pankaj,
I also want to save 30 k this finanacial year for tax saving.Im little confused whether to invest in ULIP plans or Tax saving mutual funds.Is it ok that i will invest through SIP Rs 6000 from Dec upto march2011,then reduce the amount by Rs 1000 per month from April .Is it possible ?
@Santosh
Tax saving mutual funds are better than ULIP, but make sure you have a term insurance plan already.
SIPs are for same amount for the tenure and minimum tenure is 6 months generally. You can start a 6 months SIP, starting Nov.
So which SIP should i go for.As ur suggesting funds name in above comments on various fund organisations,the NAV value for these funds are on higher side.Is it ok to invest now in these funds,or any other funds are there which have recently launched related to Tax saving.
And also i have LIC Jeevan Anand & Jeevan saral .Are these Term insurance plan?.Can u clarify on Term insurance.
@Santosh
These are not term insurance plans.
LIC has two term plans: Anmol Jeevan-I and Amulya Jeevan-I
@Santosh
NAV is not the correct measure to determine if its right for investment or not.
Rather compare the returns funds have generated in past. Its the percentage return that matters.
Recently launched funds with low NAV have no history to prove themselves good or bad.
Lets say a mutual fund has NAV 100 and you buy 10 units (total investment = 1000 Rs) and it gives 50% return after 3 year, then get profit of 500 Rs.
Another mutual fund with NAV 10 with 100 units (investment=1000 Rs) with 50% return will also give you same 500 Rs.
Hi Pankaj,
I am new in MF investment.
I want to invest 10K… Can you suggest me one MF, who is consistently performing well.
One more thing… what is more safe? SIP or Invest few thousands at a time.
Thanks in advance
@Rahul
You can invest in HDFC Tax saver.
SIP is safer than one time investment.
Pankaj,
Can you pls suggest what are the bonds we have to buy to get tax benifit under 80CCF(20000 after 1,00,000).
Thanks in advance.
Mohith
@Mohith
These are infrastructure bonds issued by IDFC (Infrastructure Development Finance Company), L&T Infra, IFCI (Industrial Finance Corporation of India), LIC (Life Insurance Corporation of India) and some other non-banking finance companies.
So far IDFC, L&T and IFCI have issued these bonds and there will be more such issues open till March 2011.
Thanks for ur early comments.Dividend option better or Growth option are better for SIP investment in any Mutual fund.
Hi Pankaj….
This is the first time m goin for tax planning…jst wanted to know as to which option is better in tax saving mutual fund- lumpsum or SIP?? I guess SIP has a disadvantage that amount invested in 1st month will be withdrawable in 36th month,2nd in 37th ,3rd in 38th….. nd it boils down to an effective lock-in of 6 years instead of 3 years..
Than
@Neha
SIP is better than lumpsum investment, as it also averages out cost of buying.
Lets say, you invest now in lumpsum and market goes down then your whole investment will suffer. Whereas in case of SIP, some of your units will be bought at higher price and some at lower price, thus averages cost.
And regarding 6 years, start an SIP for one year only, so max period will be 4 years.
Hi Pankaj,
What would be your ideal suggestion for investment at 20k sensex, purely for tax saving purpose!
@Mohit
SIP into ELSS mutual funds.
Hey Pankaj…thnkss for such a prompt response…..one more querry….
wats d minimum tenure tax saving mutual fund SIP ..6 months or 1 year for :
HDFC TAX SAVER
CANERA ROBECCO TAX SAVER
RELIANCE TAX SAVER
@Neha
Minimum SIP period for these funds is 6 months.
Hey, i had purchased a mutul fun in the month of march if i want to withdraw it how much penalty would i pay…
@Rohan
There is a lock-in on tax saving mutual funds for 3 years. You won’t be able to withdraw it before 3 years.
Is it right time to invest about 15,000 INR in HDFC Long Term Advantage Fund (G). Pls suggest few ELSS funds where I can invest.
@Sudip
As market was good for last 9-10 months, HDFC long term advantage fund too have gained a lot.
There are chances of correction in near future, which may put investment in loss for short term.
Its better that you wait for some correction or invest through SIP.
Some of the other good funds are Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield, DSPBR Tax Saver and Fidelity Tax Advantage.
Dear Pankaj,
Thanks for your suggestion.
Regards,
Sudip
Hi Pankaj,
I wanted to invest in SIPs. Per my understanding I cannot claim tax benefit if I invest in SIP. Am I correct ?
Also, please suggest me 3 SIPs that I can invest in now. I m looking at a period of 3 years.
-Regards,
Preet.
@Preet
You can claim tax benefit even if you invest in SIP, but it has to be in tax saving mutual funds (ELSS)
You may choose to invest among Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield – Growth, DSPBR Tax Saver and Fidelity Tax Advantage
Hi pankaj,
I want to Invest around 35K in Tax saving mutual funds,Which mutual fund is best to invest in the last week of december.Frm last 3 yrs i am investing in SBI magnum tax gain (G),Is it better to reinvest in the same MF or any other is better one?
Thanks,
Ram
@Ram
Its not advisable to invest into mutual funds as lump-sum. Better is to invest through SIP route.
As market is on high, there are chances of further correction, which may erode your investment in near future.
You may choose to invest into mutual funds among Canara Robeco Equity Tax Saver, HDFC Taxsaver, Franklin India Taxshield – Growth, DSPBR Tax Saver and Fidelity Tax Advantage
Hi Pankaj,
I wanted to go for a Child Plan that covers for my Child Education. Here, I want to save taxex von the invsetment and I am also lookin for good returns. Can you suggets me something. I heard that the best plans are that which have a low Premium allocation Charges. Is it true ? How is Aegon Religare as a Child Plan ?
@Preet
I don’t think, Child education plans from insurance companies are correct ones for children future. So I won’t advise you to put money into child education insurance plans.
There is no need of a insurance component in child plans. Insurance is an expense and not an investment. Moreover, most of the child plans are ULIP based and have bad load structures.
Its better to invest in mutual funds and PPF. There are mutual funds (mostly balanced funds) available that focus on long term children needs. You may consider good funds like HDFC Children`s Gift Fund and Prudential ICICI Child Care Plan.