Equity Linked Savings Schemes (ELSS) are tax-saving mutual funds that invest at least 65% in equity and come with a three-year lock-in period, offering potential tax benefits under Section 80C of the Income Tax Act, 1961. ELSS provides options for growth, dividend payout, and dividend reinvestment, allowing investors to enjoy tax-free dividends and long-term capital gains. While ELSS investments can yield high returns, they are subject to market risks and past performance is not indicative of future results.

1. Equity –Linked Savings Schemes
(ELSS)

2. ELSS, an acronym for Equity Linked Savings Scheme, which is
a Tax Saving Mutual Fund Scheme.
ELSS mutual funds in simple term are mutual fund schemes
maintaining a minimum of 65% of their investments in
equity.
Open-ended scheme.
Returns from an ELSS fund are market related and has a lock in
period of three years..
Investors get the Tax Benefit on the amount invested as per
the Income Tax Act’1961.
Lump sum, Systematic Investment Plan and Systematic
Transfer Plan options are also available.
Disclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

3. • Equity oriented funds are exempt from long term capital gain tax and any capital
appreciation in equity oriented funds after 1 year is tax free.
• Tax Free Dividend in the hands of the investor.
• Shorter lock in period of 3 years as compared to other traditional tax saving vehicle.
• Investors are eligible for claiming Deduction up to Rs. 1.50 Lakh from there Income under
section 80C of the Income Tax Act’1961.
• Potential for Higher Returns.
• Flexibility to invest small amounts through SIP and STP
• Two benefit of Saving Tax and Capital Appreciation.
Disclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

4. ELSS
Dividend
Payout Option
Reinvestment Option
Growth
Disclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

5. • Growth Plan: Investors don’t earn any dividend during the time they hold the
fund. At the time of exit they get a lump sum amount depending on the prevailing
Net Asset value (NAV) of the scheme at the end of the tenure of the scheme.
Dividend Payout Plan: The Income/Profit earned by the fund is distributed
among the investors. The dividend which the investor earns is not taxable.
Dividend Reinvestment Plan: The dividend declared by this scheme is
reinvested at the prevailing NAV on the day of dividend declaration. The investors
is then liable to get the additional tax benefits on the reinvested dividend amount.
Disclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

6. Note: There can also be downside in case of ELSS.
Instruments ELSS PPF BANK FD
Lock in period 3 years 15 years 5 years
Gains Tax Free Not Available Not Available
Dividends/Interest Tax Free Tax Free Taxable
Market Linked Returns Yes No No
SIP/ STP Facility Available Not Available Not Available
Risk Factor High No No
Return High Low Low
Disclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

7. Scheme Name ELSS Tax Saving FD PPF
Installment Amount (Every Year) 1,50,000 1,50,000 1,50,000
Number of Installments (in Year) 15 15 15
Total Amount Invested 22.50 Lakhs 22.50 Lakhs 22.50 Lakhs
Fund Value as on (March-2014)
Approx.
1.17 Crs 47 Lakhs 47 Lakhs
CAGR (%) 18.96% 8.70% 8.70%
Amount (in Rs.)
Disclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

8. Particulars Without ELSS/80C
Tax Saving Investment
With ELSS/80C
Tax Saving Investment
Gross Total Income Rs.7,50,000 Rs.7,50,000
Invested under Section 80C Nil Rs.1,50,000
Net Total Income Rs. 7,50,000 Rs. 6,00,000
Tax on Net Total Income Rs.75,000 * Rs. 45,000 *
Tax Saved on Investment Nil Rs. 30,000
What’s the impact on Tax when you invest in ELSS and on
the other side ignore investing in ELSS!
* Tax on Net Total Income is excluding cess @ 3%.
ELSSDisclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

9. To invest in ElSS, investors need to comply with Know Your Customer (KYC)
regulations.
Once the KYC is verified, the investors has to approach their Asset Management
Company (AMC) to invest in ELSS. Here the investor has to fill the ELSS subscription,
which has to be duly signed by him, along with the required documents.
The subscription form along with the investment amount cheque should be submitted
at the AMC.
In case of SIP an additional form has to be submitted where the investor has to select a
date on which the amount for SIP investment will be deducted form his account on the
date of every month until further notice to the investor.
Disclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

10. Purely from a tax management perspective, ELSS investment stands out as a
preferred destination.
Most efficient Tax Saving Scheme.
Provides Long-term Investing discipline.
Serves the purpose of both Investing Money and Saving Tax .
Disclaimer : Mutual Funds and securities investments are subject to market risk and there can be no assurance or guarantee that the objectives of the Schemes will be achieved.
Past performance may or may not be sustained in the future. Refer to the respective SID and statement of Additional Information before Investment. PPF/NSC rate effective as
applicable for the year 2014-15. Deduction under section 80 C for FD has been started from 2006 only. Interest rate source: RBI & SBI

11. Latin Manharlal Securities Pvt. Ltd.
Viraj, 6th Floor, 124, S.V. Road, Above HDFC Bank , Khar (w), Mumbai- 400 052.
www.latinmanharlal.com
Contact : 022- 40350101/ 40350187