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Tax Saving Mutual Fund Schemes

Financial Services

[ The following report gives us the description of three tax saving mutual funds schemes]

Introduction

There are many schemes which give tax advantage on investments .e.g.:1. Insurance2. NSC/KVP

3. Bank fixed deposits of 5 years & above

4. RBI deposit schemes

5. PPF

6. Tax saving schemes of mutual funds

Most of the above schemes give an average return of 7-9 % over long time periods. Lock-in time also varies from 3-7 years. As per historic data the best returns were given by tax saving schemes of mutual funds with a lock-in of only 3 years which is the minimum for a tax saving scheme. Therefore it is suggested that tax saving money should be invested in Tax saving mutual funds for best returns along with tax benefit on investment amount as well as on the return on investments i.e. dividends which is completely tax free. Following tax saving schemes are doing very good performance:

1. HDFC tax saver2. Prudential ICICI tax saver

3. Franklin India tax shield

4. Birla Equity fund

5. Tata tax saving fund

6. Reliance tax saver (ELSS) fund

7. SBI tax saving fund

A return of 15-20% p.a. should be achieved comfortably in a tax saving scheme of mutual fund as the funds are invested for a min. period of 3 years i.e. the lock in period.ELSS, popularly known as Tax Saving Mutual Fund, is a category ofMutual Fundwhere a major portion is invested in Equity & Equity related instruments. An investment up to 1 lakh is exempted from income under section 80C, but there is a lock in of 3 years before you can withdraw. However, there is no upper limit on investments and long term capital appreciations are tax free. Dividends received are also tax free in the hands of the investor.

Types of ELSS

1.Growth:Investor does not get any income during the tenure of the investment. He will get a lump sum amount at the time of redemption or on maturity.

2. Dividend: Investor gets a dividend from the fund house. He has two options:

He can cash on the dividends.

He can opt for dividend re-investment option.

In most funds you have Growth as well as Dividend options which you can choose depending upon your priorities.

The following report gives us the description of three tax saving mutual funds schemes1. ICICI Pru Tax Plan (G)Latest NAV

127.98 (30/08/11)

52-Week High

155.09 (10/11/10)

52-Week Low

122.45 (26/08/11)

Fund Category

Equity: Tax Planning

Type

Open End

Launch Date

August 1999

Risk Grade

Average

Return Grade

Above Average

Net Assets (Cr)

1,323.19 (30/06/11)

Benchmark

S&P CNX 500

Annual Returns

20102009200820072006

Fund Return

24.11

112.00

-56.03

40.95

26.15

Rank In Category

9/37

1/32

16/29

22/26

17/23

Category Average

18.78

81.79

-55.56

59.25

30.18

Sensex

17.43

81.03

-52.45

47.15

46.70

S&P CNX Nifty

17.95

75.76

-51.79

54.77

39.83

Quarterly Returns

Q1Q2Q3Q4

2011

-6.69

0.56

--

--

2010

4.64

3.77

12.29

1.79

2009

-0.91

51.11

25.62

12.71

2008

-28.95

-9.83

-7.51

-25.78

2007

-10.92

13.19

7.89

29.56

2006

18.23

-15.75

23.35

2.68

2005

8.92

13.24

28.84

6.22

2004

-18.36

-3.23

32.76

30.09

2003

-10.13

43.79

40.24

38.14

2002

15.86

1.69

-13.24

10.99

2001

-13.41

0.68

-13.46

24.67

2000

6.97

-34.73

-7.42

-8.09

1999

--

--

--

55.78

Fund Details

VR Category

Equity: Tax Planning

Type

Open End

Load

Entry Load

Nil

Exit Load

Nil

Basics

Min Investment (Rs)

500

Subsequent Investment (Rs)

500

Min Withdrawal (Rs)

500

Min Balance

--

Pricing Method

Forward

Purchase Cut-off Time (hrs)

15

Redemption Cut-off Time (hrs)

15

Redemption Time (days)

3

Lock-in

1095 days

Cheque Writing

--

Systematic Investment Plan

SIP

Yes

Initial Investment (Rs)

500

Additional Investment (Rs)

500

No of Cheques

5

Note

The scheme also offers a quarterly SIP with minimum investment of Rs 5000 and 4 post-dated cheques of Rs 5000 each.

Tax Section Applicable

Section 88 (2) (XIII B)Section 54EASection 54EBSection 54ECSection 54EDSection 10(33)Section 112(1)Section 94(7)Trailing Returns

As of 30Aug2011Fund ReturnCategory ReturnSensexS&P CNX Nifty

Year-to-Date

-15.26

-15.59

-19.96

-19.80

1-Week

0.83

0.57

-0.50

-0.59

1-Month

-9.27

-7.72

-9.79

-10.26

3-Month

-7.84

-6.25

-9.96

-10.11

1-Year

-6.41

-9.51

-8.96

-9.16

2-Year

12.55

6.38

1.54

1.96

3-Year

12.60

7.14

4.07

4.11

5-Year

8.21

8.38

6.96

7.48

Return less than 1-year are absolute and over 1 year are annualised

NAV Chart

2) UTI Equity Tax Savings Plan-G

Current Stats & Profile

Latest NAV

36.76 (30/08/11)

52-Week High

45.22 (09/11/10)

52-Week Low

35.44 (26/08/11)

Fund Category

Equity: Tax Planning

Type

Open End

Launch Date

December 1999

Risk Grade

Average

Return Grade

Below Average

Net Assets (Cr)

496.47 (30/06/11)

Benchmark

BSE 100

Relative Performance (Fund Vs Category Average

Trailing Returns

As of 30Aug2011Fund ReturnCategory ReturnSensexS&P CNX Nifty

Year-to-Date-14.85-15.59-19.96-19.80

1-Week0.460.57-0.50-0.59

1-Month-6.63-7.72-9.79-10.26

3-Month-4.62-6.25-9.96-10.11

1-Year-6.80-9.51-8.96-9.16

2-Year6.166.381.541.96

3-Year5.657.144.074.11

5-Year6.338.386.967.48

Return less than 1-year are absolute and over 1 year are annualised

Annual Returns

20102009200820072006

Fund Return17.5772.88-54.6750.9218.56

Rank In Category21/3724/3213/2919/2622/23

Category Average18.7881.79-55.5659.2530.18

Sensex17.4381.03-52.4547.1546.70

S&P CNX Nifty17.9575.76-51.7954.7739.83

Quarterly Returns

Q1Q2Q3Q4

2011-6.86-1.42----

20102.101.1513.610.21

20090.5238.5018.404.88

2008-26.89-12.84-7.74-22.90

2007-9.0514.1617.7123.48

200614.13-16.3313.199.68

20050.568.7522.039.95

20041.13-8.2714.3022.12

2003-4.5614.6328.3931.78

200213.72-1.48-4.4210.61

2001-11.28-2.19-19.9124.16

2000---4.90-7.562.88

Fund Details

VR Category

Equity: Tax Planning

Type

Open End

Load

Entry Load

Nil

Exit Load

Nil

Basics

Min Investment (Rs)

500

Subsequent Investment (Rs)

500

Min Withdrawal (Rs)

--

Min Balance (Rs)

500

Pricing Method

Forward

Purchase Cut-off Time (hrs)

15

Redemption Cut-off Time (hrs)

15

Redemption Time (days)

10

Lock-in

1095 days

Cheque Writing

--

NAV Chart

3) LIC Nomura MF Tax Plan-G

Current Stats & Profile

Latest NAV

26.0668 (30/08/11)

52-Week High

33.0172 (09/11/10)

52-Week Low

24.8573 (26/08/11)

Fund Category

Equity: Tax Planning

Type

Open End

Launch Date

March 1997

Risk Grade

Above Average

Return Grade

Low

Net Assets (Cr)

38.68 (30/06/11)

Benchmark

Sensex

Trailing Returns

As of 30Aug2011Fund ReturnCategory ReturnSensexS&P CNX Nifty

Year-to-Date-18.35-15.59-19.96-19.80

1-Week0.820.57-0.50-0.59

1-Month-8.78-7.72-9.79-10.26

3-Month-8.26-6.25-9.96-10.11

1-Year-9.91-9.51-8.96-9.16

2-Year0.306.381.541.96

3-Year2.657.144.074.11

5-Year2.618.386.967.48

Return less than 1-year are absolute and over 1 year are annualised

Annual Returns

20102009200820072006

Fund Return15.7362.17-56.8748.7628.25

Rank In Category25/3731/3218/2920/2615/23

Category Average18.7881.79-55.5659.2530.18

Sensex17.4381.03-52.4547.1546.70

S&P CNX Nifty17.9575.76-51.7954.7739.83

Quarterly Returns

Q1Q2Q3Q4

2011-5.54-2.96----

2010-0.772.5312.810.83

2009-1.9144.4915.35-0.80

2008-32.30-17.10-1.79-21.75

2007-8.4711.1312.4930.01

200621.48-14.0410.6311.02

2005-1.255.0617.331.74

20040.16-11.689.6814.63

2003-7.7922.8833.0229.50

20027.962.31-11.3715.69

2001-44.71-4.14-2.093.35

20001.40-20.23-7.152.59

199919.714.3232.899.02

19987.16-15.004.56-1.09

1997-----2.19-1.73

Fund Details

VR Category

Equity: Tax Planning

Type

Open End

Load

Entry Load

Nil

Exit Load

Nil

Basics

Min Investment (Rs)

500

Subsequent Investment (Rs)

100

Min Withdrawal (Rs)

--

Min Balance

--

Pricing Method

Forward

Purchase Cut-off Time (hrs)

15

Redemption Cut-off Time (hrs)

15

Redemption Time (days)

3

Lock-in

1095 days

Cheque Writing

--

Systematic Investment Plan

SIP

Yes

Initial Investment (Rs)

--

Additional Investment (Rs)

100

No of Cheques

6

Note

Exit load of 2.25% if units are redeemed before 1 year.

Tax Section Applicable

Section 88 (2) (XIII B)Section 54EASection 54EBSection 54ECSection 54EDSection 10(33)Section 112(1)Section 94(7)

NAV Chart

Submitted by:

Divya Vishwanadh (A-01)

Sumedha Gupta (A-02)

Shipra Singh (A-06)

Deepshikha Sahu (A-08)

Vijeta Jain (A-31)

BBA + MBA (Dual)

Submitted to: Geetika Chawla

Amity University