Presentation on theme: "What is in a store for a smart tax payer ? Think Smart………… Act with smartness……… Enjoy the fruits of smart action….."— Presentation transcript:
What is in a store for a smart tax payer ? Think Smart………… Act with smartness……… Enjoy the fruits of smart action…..
Invest in Tax Saving Schemes (Equity Linked Saving Schemes - ELSS) of Mutual Fund
Why ELSS? Product / Instrument Lock – in-Period Returns ( p.a.) FeaturesMin Investment ELSS % (returns on 5 years investm ent) 1)Dividend Tax Free 2) Capital Gains Tax Free 3) Investment up to 1 Lac (Tax exemption) Rs. 500/- P.M (Systematic Investment Plan) Or Rs. 5000/- PPF158 %Limited up to Rs.70000/-Rs. 500/- NSC68 %Interest TaxableRs 100/- Bank Deposit 59 %Interest TaxableRs. 100/- ULIP(UTI)512%Capital gain TaxableRs.10000/-
Performance of Top Tax Saving Schemes. Sr. No.Schemes Name5 Years (30/11/10) Since Launch (30/11/10) 1Franklin India Taxshiels17.22%26.66%-April99 2Hdfc Tax Saver18.71%24.63%-June96 3Icici Pru Tax Plan21.23%18.58%-AUG99 4Reliance Tax Saver18.17%17.96%-Sep2005 5Sundaram BNP Paribas Tax Saver 20.20%28.1%-Dec99
Magic of SIP If Investor would have started to invest Rs.1000 (Rs. One Thousand Per Month Only) for Five years or since inception. The amount, investor would got, is unimaginable with additional benefits of tax savings. Inception Date For 60mth Since Inception For 60mth Since Inception 1Franklin India Taxshiels Apr-9960,000140,00095,615756,716 2Hdfc Tax SaverJun-9660,000176,000101, ,620 3Icici Pru Tax Plan Aug-9960,000136,00085,550418,412 4Reliance Tax SaverSep-0560,00063,00093,990100,517 5Sundaram BNP Paribas Tax Saver Nov-9960,000132,00094,027695,390 Amount of Investment (Rs.) Market value As on 30/11/2010 (Rs.) Scheme Name Sr. No.
Why invest in Tax Saving Schemes Opportunity to benefit from the long term India Growth Story 3 Years lock-in- provides mutual fund :- * enough flexibility to take decision with long term horizon * freedom from short term liquidity concerns * potential to invest in fundamentally strog stocks which are likely to create long term value. * ability to create a stable portfolio with lower turnover could result in lower impact / transaction cost.
Positive outlook for Equity India growth story intact at 8-9 % GDP Sensex company growth above 15 % Favourable Demography Domestic Consumption story Less Dependant on Exports Less Vulnerable to global economy Strong outsourcing story – IT / Pharma
Have you considered Inflation ? As inflation rises, every rupee will buy a smaller percentage of the same product. To protect the capital, investor should earn higher rate of returns than the rate of inflation With rise in Inflation, purchasing power will be reduced to that extent
Why Tax Saving Schemes ? CAGR (Compounded annual growth return) for 3 years past performance may or may not be sustained in future
Why invest in equity funds ? * Better inflation adjusted returns from equity compared to alternative investment options. * Historical evidence in favour of equity * No long term capital gain on equity (above one year) * Indian growth story drive the market