Not only the salaried individuals, even businessmen across the country would be up in arms to calculate their tax-liability.
All around the various offices across India, this is the merry making time for the investments advisors, insurance agents and financial planners. High profits of commissions and handsome earnings for these individuals in these 2-3 months. However, the individuals end up making a mess of their money, when they end up buying unwanted and useless insurance products, or make unnecessary investments in the name of tax-savings. Please note that financial planning is not a last month job. You should not go for it starting in January, but start planning for it in April-May or latest by September-October period. Otherwise, in a hurry, you would end up in a situation like this.
A new find has been launched by SBI in the name of tax savings. It’s called the SBI Tax Advantage fund providing tax benefit to individuals under section 80C of Income Tax Act 1961. Primarily it’s an ELSS scheme, or Equity linked Savings scheme, with a minimum lock-in period of 3 years.
Here are the details about the SBI Tax Advantage fund as available from different sources:
What is the SBI Tax Advantage Fund – Series I about?
SBI Tax Advantage Fund – Series I is a ten year close-ended Equity Linked Savings Scheme (ELSS) with 3 year lock-in period and tax benefit. The investment objective of the scheme is to generate capital appreciation over a period of ten years by investing predominantly in equities of companies across large, mid and small market capitalization, along with income tax benefit.
Hence, once important thing that should be kept in mind while investing in this NFO is that the fund is designed for capital appreciation for 10 year long horizon.
Highlights
• NFO Price Rs. 10/- per unit
• No Entry Load for Investors
• Minimum initial investment is Rs. 500/- in multiples of Rs. 500/- thereafter with no upper limit *
• Growth and Dividend (payout) options available
• However, investment up to Rs. 1,00,000/- will qualify for deduction under section 80C of Income Tax Act 1961
Asset allocation
| Instrument | Normal allocation | Risk Profile |
| Equity and Equity related instruments | 80 - 100% | High |
| Debt and Money Market Instrument | 0 - 20% | Low to Medium |
Investment Objective
The investment objective of the scheme is to generate capital appreciation over a period of ten years by investing predominantly in equities of companies across large, mid and small market capitalization, along with income tax benefit.
Should I Invest in SBI Tax Advantage Fund?
SBI Tax Advantage Fund – Series I claims to offer a triple benefit:
• Equity Linked Returns
• Tax Free Returns
• No Entry Load
Another claim is on the decades of experience that the SBI Fund management has. However, they are not willing to guarantee even 1% return even if you promise to remain invested for 10 long years.
It’s a Close Ended Scheme, which means only a limited no. of units can be created, hence all the applicants will not get the units if the demand exceeds the supply.
On the official website of SBI Tax advantage fund, there are some tables showing how well the previous ELSS schemes of SBI have performed and how well they have beaten the markets and other similar instruments, but ultimately, its all filled with loads of special characters like * and ^ and other things, which makes it difficult for the common man to understand the numbers and the way they are calculated.
| Ultimately, in essence, this is a similar kind of scheme as any other ELSS. Everything depends upon market conditions so, the investors have to take a chance. Withdrawal is allowed only after 3 years of lock-in period. Investors really willing to save tax and wanting to invest in the equity markets can opt for this scheme. The time seems t be justified as the markets are trading low. One may try his luck for the next 3 years (atleast). | Table of Contents |
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