The purpose of the Investment scheme is to produce long-term capital appreciation from a portfolio with considerable diversity in corporate portfolio and equity securities and to allow investors to take advantage of the total income deduction as permitted by the Income-tax Act 1961.
Why DSP tax saver fund – Direct Plan-Growth is a tax-saver scheme
You can save up to Rs 46,800 in taxes every year
You will get the highest return compared to other 80C investments
The lock-in period is three years, which is the lowest.
Fund investment in %
95.9% investment in Indian stocks
65.79% is in large-cap stocks
13.22% is in mid-cap stocks
9.69% in small-cap stocks
Suitability for investment in direct plan-growth is a tax-saving plan
If you want to invest your money for at least three years and want the benefit of income tax savings in addition to expecting high returns. Such investors should also be prepared for the possibility of a moderate loss in their investment and a lock-in period of 3 years.
If you invest for five years or more, you can easily beat the rate of inflation. It is more than fixed income options. Also, under Section 80C of the Indian Income Tax laws, you get tax exemption on the amount invested. According to this section, cumulative investment in eligible securities for funds up to Rs 1.5 lakh in this financial year is exempt from tax.
But be prepared to fluctuate according to your interest in investment. Please remember that you cannot withdraw your money from this fund before completing three years from the date of investment. As with all equity funds, you only have to invest through the SIP route.
Here is compare tax saving options
On Fixed Deposit, you will get 6.25%, 5 Year – Returns, five years lock-in period, interest tax will be applicable on maturity.
On DSP tax saver fund – Direct Plan-Growth Fund, you will get 15.9%, and you will get an average return over any five consecutive year periods, three year lock-in period, LTCG as tax applicable on redemption.
On Public Provident Fund, you will get 7.9%,5 Year – Returns, 15 years limited withdrawal after five years, No Tax on Redemption.
Taxation of Income: Capital gains
If an investor sold his mutual fund units after one year from the date of the start of the investment, if you earn up to Rs 1 lakh in your financial year, then this amount will be exempt from tax. If you get more than Rs 1 lakh, then this amount will be taxed at a rate of 10%.
If you are selling your mutual fund unit within one year from the beginning of the date of investment, then any amount you get will be taxed at the rate of 15%.
As long as you continue to operate the units, there will be no tax.
Note: If you need to redeem your investment in less than five years, do not invest in any other ELSS fund.