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  #1  
Old 14th December 2009, 12:25 PM
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Default ELSS Funds



Dear All,

I am currently looking at the following ELSS schemes for Tax Planning and would like your opinion (especially negatives) on the same:

1. Magnum Tax Gain
2. HDFC Tax Saver
3. Sundaram BNP Paribas Tax saver
4. ICICI Prudential Tax Plan
5. Birla Sun Life Tax Relief 96
6. Canara Robeco Equity Tax Saver

Would ideally like to diversify in upto 4 schemes so please advise me which two can be dropped.

Thanks.
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  #2  
Old 14th December 2009, 12:32 PM
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From the above, I have invested in SBI Magnum Tax Gain, and it has disappointed me. I expected better returns over the last two years. I am sure there will be better funds in the market.
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  #3  
Old 14th December 2009, 04:32 PM
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All of these are good ELSS funds, can choose a mix n match of 2 to 3 funds for ur ELSS holdings
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  #4  
Old 4th January 2010, 11:17 AM
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Default Open-ended funds come under 80C?

Hello,

I just want to confirm does open-ended funds come under 80C deductions?

Thanks,

Nirmal
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  #5  
Old 4th January 2010, 12:03 PM
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Quote:
Originally Posted by nirmal.jingar View Post
I just want to confirm does open-ended funds come under 80C deductions?
Yes, all of the above mentioned funds are open-ended ELSS funds.

Since you are claiming a tax rebate under sec 80C, there is a mandatory lock-in period for 3 years from purchase/allotment date.

Moreover, if you have invested in an ELSS fund and not shown that as a 80C investment and have not claimed rebate for the same, then you can get a signed letter from IT department in this regard and withdraw your ELSS fund units even before 3 years.
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  #6  
Old 4th January 2010, 12:27 PM
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Quote:
Originally Posted by Prudent_Investor View Post
Moreover, if you have invested in an ELSS fund and not shown that as a 80C investment and have not claimed rebate for the same, then you can get a signed letter from IT department in this regard and withdraw your ELSS fund units even before 3 years.
This bit is not common knowledge. Thanks for sharing.
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  #7  
Old 4th January 2010, 02:47 PM
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Thanks for reply. It's really helpful.
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  #8  
Old 4th January 2010, 05:11 PM
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Quote:
Originally Posted by nirmal.jingar View Post

Please suggest me two best fund for tax saving.
I invested this year in the following two funds :

1. HDFC Tax Saver [CAGR of 35% over last 13 years]

2. Birla Sun Life Tax Relief '96 [CAGR of 33% over last 13 years]

Other options :

Sundaram BNP Paribas Tax Saver
Fidelity Tax Adavantage
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  #9  
Old 4th January 2010, 06:01 PM
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Which broker should I choose, which provide good service from the following:
1. IDBI
2. Karvy
3. Infoline
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  #10  
Old 4th January 2010, 06:27 PM
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Quote:
Originally Posted by Prudent_Investor View Post
I invested this year in the following two funds :

1. HDFC Tax Saver [CAGR of 35% over last 13 years]
In 2005, after going thru past performance I invested in HDFC tax saver and HDFC Long Term Advantage. At maturity in 2008, it was at the bottom of the pile among all ELSS

For a SIP from 2005 Oct to 2006 May, I got a measely return of 44 % in 4 years, a CAGR of less than 10%
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  #11  
Old 4th January 2010, 10:41 PM
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Quote:
Originally Posted by nirmal.jingar View Post
Which broker should I choose, which provide good service from the following:
1. IDBI
2. Karvy
3. Infoline
Hi Nirmal,

Kindly navigate through the forum and post ur queries in relevant threads. There are many threads on brokerage firms in Personal Finance & Investing > Financial Services.

Doing so will help us benefit from each other's queries and avoid repeat posts to a great extent.

Feel free to ask any and every doubt regarding investments and we all will try to help you.
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  #12  
Old 4th January 2010, 10:43 PM
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Quote:
Originally Posted by Atiker View Post
In 2005, after going thru past performance I invested in HDFC tax saver and HDFC Long Term Advantage. At maturity in 2008, it was at the bottom of the pile among all ELSS

For a SIP from 2005 Oct to 2006 May, I got a measely return of 44 % in 4 years, a CAGR of less than 10%
Equity Investment is for the long term, HDFC TaxSaver has been among the top performing ELSS funds for 2009 with over 100% return. If you invest ( I mean invest and not holding on to earlier investments ) over the long term, you are sure to get the benefits from this fund.
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  #13  
Old 5th January 2010, 11:38 AM
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Default

Finally decided to divide amounts across all 6 funds...

Quote:
Originally Posted by entee View Post
Dear All,

I am currently looking at the following ELSS schemes for Tax Planning and would like your opinion (especially negatives) on the same:

1. Magnum Tax Gain
2. HDFC Tax Saver
3. Sundaram BNP Paribas Tax saver
4. ICICI Prudential Tax Plan
5. Birla Sun Life Tax Relief 96
6. Canara Robeco Equity Tax Saver

Would ideally like to diversify in upto 4 schemes so please advise me which two can be dropped.

Thanks.
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  #14  
Old 7th December 2012, 09:23 PM
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Does HDFC (the AMC) adopt a policy of not investing in its sister firms? I thought I read so, somewhere; just wanted to confirm.

I was looking at the portfolio of one of its funds and was surprised that its top holding is ICICI Bank!

What does a fund need to do in order to qualify to be an ELSS fund? Isn't an ELSS fund just another equity fund? Why does the I-T department confer this special status on a select few funds and not on all equity funds?

Quote:
Originally Posted by Prudent_Investor View Post
I invested this year in the following two funds :

1. HDFC Tax Saver [CAGR of 35% over last 13 years]

2. Birla Sun Life Tax Relief '96 [CAGR of 33% over last 13 years]

Other options :

Sundaram BNP Paribas Tax Saver
Fidelity Tax Adavantage
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  #15  
Old 7th December 2012, 09:47 PM
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Quote:
Originally Posted by vaduvur View Post
Does HDFC (the AMC) adopt a policy of not investing in its sister firms? I thought I read so, somewhere; just wanted to confirm.
No, check this link. HDFC Top 200 fund has 3.24% of its assets worth 381 Cr invested in HDFC Bank.

Quote:
Originally Posted by vaduvur View Post
I was looking at the portfolio of one of its funds and was surprised that its top holding is ICICI Bank!
ICICI Bank is in no way related to HDFC AMC. So what is surprising here ?

Quote:
Originally Posted by vaduvur View Post
What does a fund need to do in order to qualify to be an ELSS fund? Isn't an ELSS fund just another equity fund?
Why does the I-T department confer this special status on a select few funds and not on all equity funds?
a) Funds houses have to specifically apply to SEBI to launch ELSS funds which comes with a 3 year lockin.

b) Yes these are equity funds with a lockin thrown in. Users are forced to keep their money invested for at least 3 years (growth) else if dividends are declared some amount can be returned back to investors before 3 years (dividend plan).

c) MFs have to register specific funds as ELSS schemes as per IT norms for investments in them to qualify for tax breaks. Generally new funds with similar objectives to existing funds from same fund house are not given approval. Hence, most fund houses have 1-2 ELSS funds. complete list

For example, HDFC AMC have 2 ELSS funds, whose objectives are different

HDFC LT Advantage
Quote:
The schemes provides tax benefit under section (88) and there fore has a lock in period of 3 years. It is aimed at providing capital appreciation by investing predominantly in equity and equity related instruments.
HDFC Taxsaver
Quote:
The scheme seeks capital appreciation with at least 80 per cent exposure to equities, FCDs, preference shares and bonds of companies.
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  #16  
Old 7th December 2012, 10:31 PM
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Quote:
Originally Posted by Prudent_Investor View Post
No, check this link.ICICI Bank is in no way related to HDFC AMC. So what is surprising here ?
That the HDFC Taxsaver wouldn't mind holding Canara, Axis and ICICI banks but will not touch its own HDFC Bank! A bank whose 50% CASA is trumpeted all across as a paragon of asset quality and its own sister AMC would deem it untouchable! What insider info does this sister AMC know about this bank that others don't?

(Earlier, I checked the portfolio of the other HDFC LT tax saving plan and didn't see HDFC Bank in it either!)

Quote:
Originally Posted by Prudent_Investor View Post
a)

b)
c)
Okay, but what is the benefit to the govt. in forcing taxpayers to stay locked in? Propping up the share market (a bit), may be?

If the govt. gives me a tax break for investing in a PPF (15 yrs lock-in at lower-than-mkt-avg interest) or an infra bond (nation building), I see some benefits going to the govt. - low cost funds to fund its business. What such benefit accrues from an ELSS? If the govt. mandates that such ELSS funds should invest a certain % in G-Sec or something, that'd be understandable.
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  #17  
Old 8th December 2012, 01:26 PM
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This FY my investments are the following:

1) Canara Robeco Tax Plan Dividend
2) ICICI Tax Plan Growth
3) HDFC Tax Saver Dividend

Divided my investments in all 3 with HDFC Life Term Plan making up the 80C limit.
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  #18  
Old 8th December 2012, 04:57 PM
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Quote:
Originally Posted by vaduvur View Post
That the HDFC Taxsaver wouldn't mind holding Canara, Axis and ICICI banks but will not touch its own HDFC Bank! A bank whose 50% CASA is trumpeted all across as a paragon of asset quality and its own sister AMC would deem it untouchable! What insider info does this sister AMC know about this bank that others don't?

(Earlier, I checked the portfolio of the other HDFC LT tax saving plan and didn't see HDFC Bank in it either!)
Depends completely on the fund manager, his buying levels in other banks, the fund's overall exposure to banking sector etc.

For every buyer in HDFC Bank there's a seller and both thinks they are the smartest.

Quote:
Originally Posted by vaduvur View Post
Okay, but what is the benefit to the govt. in forcing taxpayers to stay locked in? Propping up the share market (a bit), may be?

If the govt. gives me a tax break for investing in a PPF (15 yrs lock-in at lower-than-mkt-avg interest) or an infra bond (nation building), I see some benefits going to the govt. - low cost funds to fund its business. What such benefit accrues from an ELSS? If the govt. mandates that such ELSS funds should invest a certain % in G-Sec or something, that'd be understandable.
Start with this. Very old link and data may be outdated, but will give you a lot of perspective.

The primary motive of Govt. scheme to give tax break through ELSS is to introduce people to equities in a safer and risk free way. The 3-year lockin and expertise (?) of the fund manager are assumed to be safeguards.

Once the retail person is convinced of the benefits of long term investments into equities, future investments into equities will follow.

This budget, the govt. took another step forward through the Rajiv Gandhi Equity Saving Scheme(RGESS) to entice investors to invest directly to open demat accounts - thereby converting them from passive to active equity investors.


Link

Quote:
The effort to increase retail participation in equity markets is a long-term positive. However, we believe that this should be extended to equity funds as well. Small investors are better off accessing the equity markets through funds with a good track record rather than directly, which requires expertise and resources,” says Harshendu Bindal, president, Franklin Templeton Asset Management (India) Ltd.

It is roughly estimated that there are around 15 million Permanent Account Number (PAN) holders with income between Rs 2 lakh and Rs 10 lakh, that do not have a demat account at present.
As highlighted in the starting article, retail participation in equity to a larger extent can change the landscape as more and more companies will tap equity markets to raise capital (the ideal source of long term funding).

In this regard, RGESS can be good initiative.

RGESS has been officially notified by SEBI now. Here's a detailed explanation of how this will work.
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