Religare Tax Plan - an open-ended Equity Linked Savings Scheme (ELSS)

Religare Tax Plan - an open-ended Equity Linked Savings Scheme (ELSS) with a lock-in period of 3 years, seeks to generate long term capital growth from a diversified portfolio of predominantly equity and equity related securities. Its performance has been in the top quartile in the recent past. The scheme has generated a 1 year CAGR of 81.36% while the benchmark indices 'BSE 100' rose by 68.21% during the same period. The fund has outperformed its benchmark in 2 years, 1 year and 6 months tenure.

 

A few strengths & characteristics of ELSS:

 

• Tax Saver Funds have a lock-in period of just 3 years – in comparison, theother tax saving instruments like NSC / Bank Fixed Deposits / PPF have aminimum lock-in period of 5 to 6 years.
• The dividends which you receive for your investments in Tax Saver Funds are completely tax free in your hands.
• Tax Free Profits - Currently, capital gains arising at the time of redemption are exempt from tax thus allowing you to keep more of what is yours.
• Tax Exemption Twice in 6 Years – You can withdraw your tax saver funds at the end of 3 years and if you reinvest the same* , you get tax exemption twice in six years compared to just once in case of NSC.
• Return Potential - Tax Saver Funds invest in equities; which despite the short term volatility have the potential to build wealth over the long term. As these funds have a 3 years lock-in, the fund manager tends to deploy majority of the assets in equity with a long-term perspective; thus having the potential to deliver superior returns over the long term.