2. Agenda
• About ELSS
– Key Differentiation
– Advantages
• ELSS – Comparison
• Why ELSS?
• Why Equities?
• Why India?
• Fund Manager Advantages
• Tax Planning
• Past Performance
• Current NFOs
• Summary
• About Us – Services
3. About ELSS
• An ELSS (Equity Linked Savings Scheme) is a mutual fund scheme that
invests in equity & equity-related securities
• ELSS are also eligible investments under section 80C of Income Tax Act
1961, where the investments up to Rs.1 Lac* is eligible for deduction from
your total income. Thus you can easily save up to Rs.33,660/- in taxes by
investing in ELSS.
• ELSS have a lock-in period of three years. This allows the investors to
benefit from the long term growth potential of equities.
* For Financial Year 2006-07
4. ELSS – Key Differentiation
ELSS is the only investment product that offers ….
Twin Advantages
• Equity Returns
• Tax Benefits
5. ELSS – A Comparison
Instrument Expected Returns Lock-In Period
National Savings Certificate - NSC 8.16% 6 years
Public Provident Fund - PPF 8.50% Up to 15 years
Mutual Fund ELSS Around 15%-20% 3 years
Investment 1 Lac End Value of Investment in Rs. Lac after - Years
Avenue Returns 3 6 8 10 15 20
NSC 8.16% 1.27 1.60 1.87 2.19 3.24 4.80
PPF 8.50% 1.28 1.63 1.92 2.26 3.40 5.11
ELSS 15.00% 1.52 2.31 3.06 4.05 8.14 16.37
Mutual Fund ELSS returns are the assumed returns dependent on the markets
and are not guaranteed or assured
6. Why ELSS?
• ELSS offer the following advantages over traditional tax saving investments
– Potential for higher returns
– No limits on maximum investment amount
– Lower Lock-in period
Advantages of being a Mutual Fund scheme
– Tax benefits as an Equity scheme …
• Tax free dividends
• No Long-term Capital Gains
– Choice of AMCs & Schemes and also Options (growth / dividend / reinvestment)
– Convenience / Flexibility of investing (Lump sum / SIP / Switch / STP)
8. India – Why Invest in Equities
• 9% GDP growth makes India among the fastest growing economies in the
world. India presents a fundamentals led growth story expected to keep
the pace high for at least a few decades ..
• Indian companies today are very competitive – have growing cost-
effectiveness, a confident management, global outlook & plans, etc. The
Profit growth rates are very encouraging & are expected to only continue
• As profits grow (between 15%-20%) the market would also grow at such a
rate over long term since the prices always trail the profits.
• The market valuations are now fair and stocks are not overvalued. For a
long-term investor, the opportunity to create wealth over time is great.
10. Tax Planning with ELSS
Taxable
Income
Tax before
Planning
ELSS Optimal
Amt.
New Taxable
Income
Tax After
Planning
Savings
150,000 5,100 50,000 100,000 0 5,100
300,000 40,800 100,000 200,000 15,300 25,500
500,000 102,000 100,000 400,000 71,400 30,600
900,000 224,400 100,000 800,000 193,800 30,600
1,200,000 347,820 100,000 1,100,000 314,160 33,660
You can save taxes up to Rs.33,660/- by investing the optimal amount in ELSS
schemes till 31st
March for the current F.Y.
11. Summary
• India is among the most attractive investment options. Don’t miss the bus !!!
• Treat long-term wealth creation as a primary objective. Treat tax savings as
additional / bonus.
• Invest before 31st
March !!!!