Fidelity Tax Advantage Fund: Save Tax by investing in Fidelity ELSS

This article contains details & information about Fidelity Tax Advantage Fund (Fidelity Tax Advantage Fund ELSS). Also covered is the review, analysis, details and opinion about investing in Fidelity Tax Advantage Fund
Its time the financial year is ending in India and individual tax payers, expecially the salary class, are worried about tax savings. Before the Direct Tax Code or DTC gets implemented about which there are concerns that it might take away the tax savings offered by ELSS, investors might have this last chance for getting tax benefits for investing in an Equity based mutual fund.

What actually is the Fidelity Tax Advantage Fund?
Fidelity Tax Advantage Fund is a mutual fund from the world renowned Fidelity mutual fund house. Like any other mutual fund, this fund too collects money from the common investors and invests it in equity/stocks with an aim to generate returns.
It is categorized as an ELSS or Equity Linked Saving Scheme, which gives investors a tax benefit as well.

Fidelity Tax Advantage Fund Details

What is unique about Fidelity Tax Advantage Fund?
Apart from being a equity based mutual fund, this fund also offers tax savings under the ELSS scheme under section 80(C) of Income tax act i.e. any investments made in this scheme (for the entire cap of 1 Lakh Rs. under section 80(C)) will be exempted from taxes.
See related: Complete List of Qualifying investments under section 80C and Tax Savings details for Section 80C

What are the other details about Fidelity Tax Advantage Fund
The fund has been around since 2006. Since it offers tax savings, it comes with a lock-in period of 3 years i.e. investors investing into this fund for tax saving purpose cannot withdraw their money for 3 years.

Multiple options available for investments:
Growth Option
Dividend Option - Payout, Reinvestment facilities

Minimum purchase amount:Rs. 500 per application.

Mr. Sandeep Kothari is the fund manager.

What is the benchmark index for Fidelity Tax Advantage Fund
Fidelity Tax Advantage Fund tracks the BSE 200 index and is an actively managed fund

Is the SIP facility available in Fidelity Tax Advantage Fund?
Yes, SIP or Systematic investment Plan is available.
For SIP: Rs. 3,000 (minimum single investment of Rs. 500 and in multiples of Rs. 500 thereafter, minimum 6 instalments).

What are the entry load and exit load charges for Fidelity Tax Advantage Fund
Entry Load NIL
Exit load NIL

What are the other competitor products to Fidelity Tax Advantage Fund
Tax Saving Investment Funds:
Lots and lots are availble, here are a few:

- Principal Personal Tax Saver Fund (ELSS),

- SBI Tax Advantage fund

- Reliance Equity Linked Savings Fund and many more

- SBI Magnum Taxgain

If you are looking for tax saving investments on the debt side, then there are these long term infrastructure bonds plus tax saving bond issues by various other government organizations

- IRFC Tax Free Bonds

- NHAI Tax Free Bonds issue

- HUDCO Tax Free Bonds

Then there are several infrastructure bonds issues currently open which will provide you tax savings like
1) IDFC Infrastructure Bonds for Tax Saving

2) L&T Infra Bonds for Tax Saving

3) SREI Infra Bonds for Tax Saving

Investors looking for tax savings have a lot of choice for investments in various financial instruments. One can take a call about which tax saving investment to choose based upon his own capital availability, tax bracket and risk appetite.

Section 80C Tax Benefit on Expenses

Details about tax benefits and deductions which can be claimed under section 80C of Income tax
Continuing further from our previous part: Section 80C Tax Savings: Complete List of qualifying investments, here is the list of expenses which give you tax relief or tax deductions under section 80C.

Children’s Education Expense:
If you are paying for the education for your own children, then you can claim tax benefit on tution fee paid to the school or education institute. You need to maintain the receipts for claiming the tax benefit under section 80C.

Stamp Duty and Registration Charges for a home:
If you have bought a home (on your own or home loan), then you can claim tax benefit under section 80C for the registration charges and Stamp Duty charges paid towards purchase of your home. To see more on Home Loan related Tax Benefits, please check Home Loan Tax Benefits and All Home Loan Articles

So, these 2 options add to the list of qualifying expenses and investment which can be claimed for tax relief under section 80C.
Please note that investments usually have a lock-in period where you get your money back, while expenses are those which you have to pay like school fee, registration charges, etc.

What are the problems or disadvantages of section 80C ?
Nothing in this world comes without problems.
the first problem with section 80C investments is that ALL COLLECTIVE SUM of tax benefits that can be claimed is Rs. 1 lakh ONLY.
So if you have your provident fund amount at 65,000, you buy a life insurance policy by paying a premium of 30,000 and invest in a pension plan Rs 40,000 and repay your home loan PRINCIPAL amount as 25,000. Total of all your investments comes to 1.6 Lakhs.
However, since there is a limit of ONLY 1 Lakh under all collective investments you make under section 80C, you can claim tax benefit of only 1 Lakh Rs. even though you are investing Rs. 1.5 lakhs under all qualifying section 80C investments.

The second problem goes clubbed with this 1 lakh limit - there is so much wide variety of options available under section 80C, that individuals soon see their limit of 1 lakh getting frozen.
Other problem is with the ignorance about these limits. People end up buying policy after policy and investment after investments. What they dont know is that because of all these multiple investment options clubbed into on single section 80C with a limit of 1 Lakh, their investments have goen way above the limit, but they can get benefit only upto Rs. 1 lakh.

So take your own call. Decide on your own and then make a calculated investment for maximum and optimum tax benefit.

Section 80C Tax Savings: Complete List of Qualifying Investments

List of qualifying investments under Section 80C Tax Savings
Continuing further from our previous article part I Tax Savings details for Section 80C, here is the list of Qualifying Investments which are eligible for tax deductions under section 80C. The list is huge, that means you have lots and lots of options to select for tax saving as per your individual need and risk appetite. However, there are also some shortcomings of this huge no. of options.

Provident Fund (PF) & Voluntary Provident Fund (VPF):
Now-a-days, almost all companies are legally required to deduct Provident Fund from employees salary. This itself forms a major constituent of the investments under section 80C, for all the salary class employees.
Apart from the normal PF, any investments you make on your own in the Voluntary Provident Fund (VPF) also qualifies for tax saving under section 80C.

Public Provident Fund (PPF): On the lines of PF and VPF, the 15-year long PPF contributions also qualify for tax savings under section 80C.

Life Insurance Premiums:
Any premium you pay towards life insurance policies for you own self, your spouse or your children, qualifies for tax savings. However, please note that you can NOT claim tax deduction for life insurance premiums paid for your parents, in laws, siblings, etc.
If you have multiple policies, you can add all of their premiums together and claim for the collective sum. And most important point - manay people think that only LIC policies premiums are eligible for tax deductions, its not so - any life insurance policy premium paid to private insurance firms also qualifies for tax benefit under section 80C.

Equity Linked Savings Scheme (ELSS):
For the high risk takers, the ELSS scheme which has a minimum lock-in period of 3 years and invests your money in equity mutual funds also qualifies for tax savings.

Home Loan Principal Repayment:
If you have taken a home loan, there are two components you need to repay back to the bank or NBFC - first is the interest component on the loan amount and second is the loan amount itself, i.e. the principal amount.
Under section 80C, you get a tax relief on the repayment of principal amount. To see more on Home Loan related Tax Benefits, please check Home Loan Tax Benefits and All Home Loan Articles

National Savings Certificate (NSC):
If you have bought the 6 year long tax saving NSC, then that amount can be claimed for tax deduction under section 80C.

Infrastructure Bonds:
Recently, government came out with the new section especially for tax deductions to be offered for investments in Tax Free Infrastrucutre Bonds.
See more details on them and a list of available Tax Free Infrastructure Bonds.

Pension Funds – Section under 80CCC:
This is a special sub-section called 80CCC, which is a part of section 80C, exclusively for investments in pension funds. So if you are investing in any qualifying pension funds either from government or provate financial companies, then you can claim tax benefit on that investment.

Tax Saving Bank Fixed Deposits (5-Yr FDs):
Special Fixed Deposits issued by bank in the name of minimum 5 year long Tax savings fixed deposits give you another option for tax savings.

Senior Citizen Savings Scheme 2004 (SCSS):
This is recently introduced scheme under which ONLY senior citizens can invest and get returns of around 9% per annum. Any investments made in this SCSS scheme is eligbile for tax deductions.

5-Yr post office time deposit (POTD) scheme:
There are multiple post office savings scheme available for investments for various tenure. However, only one of them, that of 5 year and currently offering 7.5% interest rate is eligible for tax benefit. No other post office saving scheme qualifies for tax deductions.

NABARD rural bonds:
NABARD i.e. National Bank for Agriculture and Rural Development has issued special bonds called the NABARD Rural Bonds. Investments in these bonds is tax free under section 80C.

Unit linked Insurance Plan ULIP Investments:
Any ULIP investment, basically a mix of investment and insurance gives you tax deduction under section 80C. However, one must be aware about the long lock in periods and heavy policy charges which vary from one ULIP scheme to the other.

All the above mentioned schemes qualify for the tax benefit under section 80C. However, they are all investment schemes where you need to put in money for a certain period of time (lock-in period) to claim tax benefit. Apart from that, there are other certain expenses also which can give you tax relief under section 80C. Head on to next part Section 80C Tax Benefit on Expenses

Tax Savings Section 80C: List of Qualifying Investments under section 80C

Details about List of Qualifying instruments under Section 80C of the Income Tax for tax savings and tax benefit purposes
We all know the need for tax savings. Especially the salaried employees take this very seriously. In this article, we specifically cover the details of investments which can be made under section 80C, for benefit of tax savings.

Section 80C Tax Benefits

The section 80C allows for a limited amount of your taxable money to be deducted from your taxable salary, thereby giving you the benefit of tax savings. So how much tax savings can you make for the various savings under section 80C depends upon your individual gross salary and the investments you make under section 80C.
Let's take an example:
Suppose your taxable salary/income is Rs 5.8 Lakhs. Based upon the current income tax slabs, you need to pay tax on the entire 5.8 Lakhs at the rate of 0% for first 1.8 Lakhs, then at 10% for the income of 1.8 Lakhs to 5 lakhs, and 20% for the rest 80,000 Rs., which is above 5 Lakhs. The total tax on 5.8 Lakhs (including cess and surcharges) will be around 51,500 Rs.

Howver, now suppose that you make an investment of say 85,000 in tax saving instruments which qualify under section 80C. Now all the maths changes for your tax calculations.
Reduce the 85K from your income, you are left with net 4.95 Lacs only. Now, you need to pay 0% tax on forst 1.8 laks, and then 10% for the income from 1.8 lacs to 4.95 lakhs. Now, the total tax on 4.95 Lakhs (including cess and surcharges) will be around 34,505 Rs
Hence, in this particular case, just by investing 85,000 Rs., you were able to save taxes worth almost Rs. 17,000. You also brought down your effective tax slab from 20% to 10%.

Let's take another example. Suppose there is someone who has a net income/salary of Rs. 8.8 Laks. So his tax will come to around 121,540.00
Now suppose He too invests the same 85,000 in tax saving instruments under section 80C. Hence, his taxable income comes down to 7.95 Lakhs. Now, his effective tax is 95,790.00 only.
Hence, in this particular case, just by investing the same 85,000 Rs., this person was able to save taxes worth almost Rs. 25,750.

Most importance Point from the above example: Effective Tax Benefit from section 80C depends upon your individual total income, and your tax slab. The higher income bracket you are in, the more you save on taxes by investing in tax saving instruments under section 80C. You can attempt to bring down the tax slab to a lower bracket depending upon your own income details.

Now, from the above example it is clear that one can benefit by investing in section 80C qualifying instruments. Then we proceed to the next step - What all options are available for investments under tax savings under section 80C?. Please note that not just investments, some of your expenses can also be eligible for tax deductions under section 80C. Proceed to the Complete List of Qualifying investments under section 80C

SBI Magnum Taxgain Scheme: Save Tax by investing in Equity Mutual Fund of SBI Magnum Taxgain

This article contains details & information about SBI Magnum Taxgain Scheme (SBI Magnum Taxgain Mutual Fund). Also covered is the review, analysis, details and opinion about investing in SBI Magnum Taxgain
So its time for financial year end and all you individuals are wondering about how and where to save taxes. The salaried must have received the notices from their accounts and payroll department to submit tax saving investment proofs and others will be making their own calculations to work out how much taxes can be saved by investing in any tax saving scheme.

SBI Magnum Taxgain Scheme: Review Analysis Details & Opinion

To take advantage of this situation, there are lots of advertisements of various tax saving schemes in the newpaper as well as television media. One such is about the SBI Magnum Taxgain Scheme, through which you can save tax by investing for 3 long years. Let's start with the basic details of the SBI Magnum Taxgain Scheme:
What is the lock in period for investment in SBI Magnum Taxgain scheme?
being a tax saving investment product, the investment in SBI Magnum Taxgain Scheme will be locked for 3 long years. What this means is that you cannot withdraw any amount of money you invested from this SBI Magnum Taxgain Scheme till 3 years, from the date of your investment.
One other question arises - what if I invest in this mutual fund and do not claim tax benefit. Will I be able to withdraw my investment prior to 3 years?
The answer is no. Being a tax saving product, the lock in period applies to all - irrespective of whether you claim tax benefit or not.

What is the investment space for SBI Magnum Taxgain?
The SBI Magnum Taxgain will invest your money primarily in equities - that too usually of large cap stocks of the Indian Stock Market. This will be around 80% of the capital investment. Rest 20% is in debt and liquid money market instruments.

What is the minimum amount required for investing in SBI Magnum Taxgain?
You can invest in this scheme with as little as Rs. 500 and then in multiples of Rs. 500 only.
There is a SIP plan also available in SBI Magnum Taxgain.

What has been the historical performance of SBI Magnum Taxgain
SBI Magnum Taxgain is considered to be a good performer among the tax saving schemes. It's returns are claimed to be better than that of the Nifty.

Any benefit in investing in SBI Magnum Taxgain NOW?
Yes - SBI Magnum Taxgain has announced a dividend of Rs. 4 per unit with the record date of 18th March 2011. That means if you are in the list of investors of SBI Magnum Taxgain on 18th March, you will get back a cash dividend of Rs. 4 per unit.
This is like getting a portion of your locked in money earlier than 5 years. That's why you will see some ads in newspaper about SBI Magnum Taxgain now.

What are the other competitor products to SBI Magnum Taxgain
There is the SBI Tax Advantage Fund from SBI itself which can be considered.
Then there are several infrastructure bonds issues currently open which will provide you tax savings like PFC Infrastructure Bonds for Tax Saving and others. However, please note that lock in period for infra bonds is 5 years, not 3 years as is the case with several ELSS schemes like SBI Magnum Taxgain

Small Savings Schemes (Tax Saving Schemes): Investments & Risks

Given the recet turmoil in the stock markets and the case like Satyam frauds coming out, the investors trust is shaken. No body is willing to take unknown risks in the open markets by investing is stocks and mutual funds. Instead, investors are now getting more and more concerned about the security of their investments. They are also looking for safe investments that too over a shorter period of time, as the longer your investment horizon is, the longer the risk is. Ask a Satyam investor who has been holding the Satyam shares since a long time (buying at 700) and now seeing all the turmoil with current market price at around 50 Rs.
So, the need of hour is security as well as small tenure of investments. Not only that, the investors are also concerned about making large value of investments in various investment schemes. They want to invest only small amounts that too with caution. Small Savings Schemes do exactly that. They provide you with options to invest your money in small amounts, yet providing the benefits of safety and even tax saving. In this article, we will discuss about Small Savings Schemes and how they help you in making a good and secure investment.

Let's start with the basics: What are Small Savings Schemes?
Small savings schemes are offered to investors who are willing to invest small amounts of money for varied period of times. These schemes are usually offered by government backed organizations, and are designed to provide safe and attractive investment options with tax benefits to investors who want to stay away from the risks of the stock market.

What are the investment options available under the Small Savings Scheme?

There are multiple options available for investors for Small Savings Schemes. They include tax savings and investment instruments and can be listed as below:

Public Provident Fund
Employees' Provident Fund
National Savings Certificate
Kisan Vikas Patra
National Savings Scheme, 1992
Relief Bonds
Post office monthly income scheme
Post office time deposits

What are the benefits of investing in Small Savings Scheme?

There are many benefits.
First and foremost, you get safety for your invested money. They provide assured returns even through volatile markets.

Government Backing: Since all these schemes are controlled by government-run post-offices and public sector banks, the safety of your investment, timely payments of interest and repayment of principal on maturity is safe.

Small Investor Friendly: Some of these investment schemes have a minimum investment of Rs 5, making it easy for anyone to invest in the schemes.

Tax benefits: For people with high taxable incomes, the tax benefits offered by these schemes are very attractive.
Liquidity: Access to your investments is very easy.
Most of the schemes provide for premature withdrawals and a few of the schemes also offer loans based on the investment made.
These schemes can be shifted from one post office to another. Hence they are suitable for persons having transferable jobs.

What are the risks in investing in Small Savings Scheme?
Dont believe that just because the Small Savings Schemes are backed by the goverment, there are no risks. Risks are everywhere. Here is an article explaining the Post Office Savings Scheme: Investments and Risks.
Then, some schemes like PPF and NSC offer long term investments. Hence your money is locked in for long term. Beware of that fact.
Third, you may be charged for pre-mature withdrawal of your invested money.
Fourth, all schemes do not offer transfer from one office/city to other.
Fifth, please be aware that it is not easy to get the money from government offices, even after maturity of your investments. Every now and then we hear stories about how individual are harassed for getting their PF money or pension money and cases of bri-bery are reported

Review: Reliance Wealth + Health Plan

Reliance Life Insurance Company has come out with its new Reliance Wealth + Health Plan. How good is the Reliance Wealth + Health Plan? Should I invest in Reliance Wealth + Health Plan?
Should I buy this Reliance Wealth + Health Plan for tax-saving purpose? In this article, I’ll attempt to review the Reliance Wealth + Health Plan, and attempt to answer some such questions.

Reliance Wealth + Health Plan, claims to offer a mix of unit linked health insurance plus a savings and investment product. It also offers you a tax benefit for the amount of premium you pay towards this plan. This plan from Reliance Life offers the Hospitalization and Surgical Benefits and also covers Critical Illnesses. In short this plan provides you with a Personalised quality Health cover that fits your LifeStyle

The Claimed Key Features of Reliance Wealth + Health Plan

• A Unit Linked plan with Unique Savings Component
• Twin benefit of market linked return and health protection
• Choose from two different plan options
• Flexibility to take care of your family’s health
• Flexibility to switch between funds / plan options
• Option to pay Top-ups
• Option to package with multiple riders
• Liquidity through partial withdrawals

Key Benefits - Reliance Wealth + Health Plan
• A comprehensive health plan that
- helps you to pay for your routine medical expenses
- covers multiple major surgeries
- takes care of the follow-up tests and medicines post hospitalization
• Lump sum cash benefits for non covered injuries
• Fund option including Equity fund to harvest the best from the growing Equity market
• Income tax benefit under section 80C, 80 D and 10(10D) of the Income Tax will be available.
• Save today for future medical expenses

The so called claimed “Flexibility” offered – You can use the funds in your account to pay for current medical expenses, including expenses that your insurance may not cover through partial withdrawal, or save the money in your account for future needs, such as:
• Health insurance for medical expenses and savings in the eventuality of unemployment
• Cover Medical expenses after retirement
• Cover Out-of-pocket expenses
• Cover Long-term care expenses
It all looks good, but, the amount of this money will depend upon the actual NAV or fund value of your holdings, and that is subject to market risks. So ultimately, there is no certainty.

How does Reliance Wealth + Health Plan work?

The plan offers to insure multiple lives. The principal insured is the policyholder and the other insured person(s) are the family member(s). The family consists of the Principal Insured (Policyholder), the Spouse as Insured Spouse and the first two eligible children by seniority in age. The plan takes care of the hospitalization expenses which include:
• Daily Hospitalization expenses
• Intensive Care Unit expenses
• Post Hospitalization expenses in the form recuperation benefits
Charges:

The allocation charges are deducted from the premiums before allocation of units. The insurance charges (along with the service charge), are deducted through cancellation of units whereas the fund management charge is priced in the unit value.

Biggest problem – everything linked to your contribution “If the Principal Insured is admitted in a hospital ward other than Intensive Care Unit (ICU), the daily cash benefit will be 5% of Annual Premium subject to a maximum of Rs.2500 per day.” That means if you are paying an annual premium of 10,000, then the maximum daily Hospital cash benefit you can claim is just 5% or just Rs. 500 per day. For spouse, the maximum cap is limited to 1500 only, again dependent on your contribution (5%). For children, it is maximum of 1250 only, limited to just 2.5% of your contribution.

Other problem – must stay in the hospital for atleast 48 hours. For less than that, you cannot claim anything.

Recuperation Benefit is available ONLY if one stays for more than 5 days or 120 hours and have eligibly claimed the Daily Hospital cash benefit

Death benefit - No life insurance – only an amount equal to the NAV value of your fund units will be paid to you, that too NAV value on the date of death. Moreover, there are NO DEATH BENEFITS FOR THE DEPENDENT SPOUSE OR CHILDREN – another drawback.

Funding Options:

1. Ready-made Plan Option
This plan means that your money will be invested as per your date of birth. The younger you are, the more exposure you will have for equities and shares. The elder you are, the more money will go towards bonds, gilts, money market instruments and debt securities.

2. Tailor-made Plan Option
This plan means you have the full freedom to choose how your money is invested. You have 4 different types of financial securities to choose from – Money market, Gilts, Corporate Bonds, Equities. Depending upon your risk appetite, you can select the investments with which the so called “fund managers” will play around with your money. Ultimately, all depends upon the LUCK and RANDOMNESS, about how the selected stocks/bonds will perform.

Withdrawal Options:
Partial Withdrawal: Withdrawal not allowed for first 3 years. Only after 3 years – part withdrawal is allowed.
Heavy charges – 5% if withdrawn in 4th year, 3% for 5th year and nil for 6th year onwards.

Not only that, there are limitations on the amount you can withdraw. For year 4 and 5 - only 10% of total fund, year 6 to 9- only 15%, Year 10 to 14 – only 20%, 15 years and above – 25% of the fund value. Last 5 years before maturity – 95% of the fund value can be withdrawn.
Switching Option: 52 FREE switches can be exercised during a year, meaning 1 switch per week.

Nomination facility is available – in case of death only

Charges: HUGE, HUGE AND HUGE CHARGES
1. Allocation charges
Year 1 – straightaway 25% charges deducted.
Year 2 onwards - 5%

2. Hospitalization charges: No figures available – they say it will vary & deducted on a monthly basis – God knows what these charges are

3. Administration Charges: Each month, 40 Rs. will go away

4. Fund Switching Charges: After 52 free switches, Rs. 100 per switch

5. Fund management charges – varies from 1.25% per annum to 1.5% per annum, depending upon your investment plan choice.

So, if after paying the heavy charges to the Reliance Fund management team and the hundreds of limitations that the insurer has in claiming the insurance and hospitalization benefits, if one still believes that he/she can benefit from this policy from, Reliance Wealth + Health Plan, then one must apply for it.

Tax benefit is available, so last minute tax saving attempts can be made through this Reliance Wealth + Health Plan. All the best!

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Tax Saving Investments: Review of SBI Tax advantage Fund

As the financial year ending comes to a close, all the salaried individuals have started receiving reminders from the accounts/payroll department to gather and furnish the proofs of investments made which qualify for tax-exemptions.

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 (% of Net Asset)	Risk Profile
Equity and Equity related instruments	80 - 100%	High
Debt and Money Market Instrument and Securitised Debt ^	0 - 20%	Low to Medium

^ the scheme may invest in derivatives (equity as well as debt) and securitised debt, as and when permitted by ELSS / SEBI guidelines

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).

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