A study on ELSS

(Equity Linked Saving scheme)

by
Satish Reddy.k
09mbma25
 Introduction
 History of mutual funds in India.

 Structure of a mutual fund company.

 Broad classification of mutual funds.

o equity funds
o money market funds
o hybrid funds
o debt/income funds
o gilt funds
 Objectives
 To analyze how ELSS works for the
objective of the investor .

 Comparison of ELSS with other tax saving

options.

 To study the benefits of investing in ELSS.

Introduction to section 80c
 Section 80 c of The income tax act 1961 provides
financial instruments with tax breaks

o limit of non taxable investment of Rs. 1 lack.

o limit on contribution to pension funds Rs.10k.

o Deduction for tuition fee for the education of

children a limit of Rs.1 lack
Other sections
 Section 10(35) : Exemption from long term
gains from mutual funds.
 Section 10(38): income from transfer of long

term capital assets.

 Section 80D: Tax relief to medical insurance

premium.
 Section 54 EC: Exemption on long term cap

gains on any asset , if gains are invested with

in six months in bonds of REC, NHA.
 About ELSS
 Featuresof ELSS
o twin benefit
o Instrument
o Deductions
o Period

 Modes of investment
o Lump sum
o SIP
 Benefits of ELSS (SIP)

 Rupee cost averaging

 Small contribution

 Discipline

 Hassle free investing

 No entry load
A comparison
 Limitations of ELSS

 Risk factor

 NAV is not transparent.

 A high Minimum lock in period.

 Prospective DTC.(2012)
Analysis of ELSS of different
companies

 Return Analysis

 Style Box Analysis

 NAV Graph Analysis

Return Analysis
 Style box
for kotak,LIC,SBI,Fidielity,HDFC
Style box
for DSP blackrock,ICICI,Principal
Style box
for
NAV graph

DSP Block Rock FIDELITY tax saver

NAV graph..

Principal tax saver Sundaram BNP

NAV graph..
NAV graph..
Conclusions and findings
An investor should consider

 Assessing the risk profile.

 Comparing returns over 3 yr period.

 Comparing on other parameters.

 Evaluating the fund house.

 Selecting the dividend option.

Thank you