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It’s that time of the year when people run around, searching for ways to save tax. In this matter, Section 80 C of the <keyword id="6354751" type="COMPANY" weightage="20" keywordseo="Income-Tax">Income Tax</keyword> Act gets the most amount of attention from investors, as it allows tax exemption through some popular investment instruments. Premiums paid for life insurance policies, investments in <keyword id="762633" type="UNKNOWN" weightage="20" keywordseo="equity-linked-saving-schemes">Equity Linked Saving Schemes</keyword> (<keyword id="103549" type="CITY" weightage="20" keywordseo="ELSS">ELSS</keyword>), five-year fixed deposits, National Savings Certificates (NSC), Public Provident Fund (<keyword id="76579" type="CITY" weightage="20" keywordseo="PPF">PPF</keyword>) and investment in Sukanya Samriddhi Yojana are some such instruments. 
 
Among these, ELSS has the potential to beat the long-term returns from all other investment options. It also allows you to save tax up to Rs. 1.5 lakh under Section 80 C. Let’s understand what ELSS is and what are the associated benefits through this article. 
 
What is ELSS? 
Equity Linked Saving Schemes (ELSS) are open-ended mutual funds with at least 65% exposure to equity. Although there’s a high degree of risk involved in this investment, it is beaten down in the long run. The returns earned through ELSS funds have outperformed other investment instruments in the long run. 
 
According to the CRISIL - AMFI ELSS Fund Performance Index in December 2016, ELSS funds as a mutual fund category have returned 3.35% in the last year, 16.64% in three years, 17.71% in the last five and 10.61% in 10 years. 
 
The minimum investment in ELSS has to be Rs. 500, while there’s no limit on the maximum amount you can put in. ELSS comes with a lock-in period of three years and withdrawal cannot be done before the completion of the stipulated period. On completion of the stipulated period, you can either redeem your scheme or continue with it. Returns from ELSS is tax-free on completion of a year. 
 
Why is ELSS your best long-term bet? 
ELSS has proven to be beneficial in terms of saving tax and yielding returns. Following are the benefits of ELSS: 
 
• ELSS allows you to claim tax deduction of up to Rs. 1.5 Lakh under Section 80C of the Income Tax Act. The proceeds on redemption of the scheme after three years of lock-in is also completely tax free. 
 
• Compared to PPFs, NSC and fixed deposits, the lock-in period associated with ELSS is relatively shorter, indicating more liquidity. 
 
• The highest ranked ELSS funds have provided a CAGR of around 20% in the last five years – far more than options such as PPF and NSC which can provide returns in the range of 8-9%. Not just that, your ELSS returns are tax-free. 
 
• This scheme is highly affordable, as the minimum amount you can invest is only Rs. 500. If you don’t have a lump sum amount, you can even invest through Systematic Investment Plans (SIPs), depositing a small amount every month. 
 
• There is no fixed maturity period. Investors can stay invested as long as they want. 
 
• Investors earn dividends even during the lock in period and it is tax free. 
 
• The scheme forces you to stay invested at least for a period of three years without any interruptions. Moreover, if you opt for SIPs, you indulge in a more disciplined saving habit which ensures high capital growth. 
• 
ELSS and other instruments that allow exemptions under Section 80C 
 
Here is a comparative analysis of ELSS and other popular investment instruments:

Looking to save tax? Give an ELSS fund a chance – For tax savings & wealth creation

New Delhi, Jan 16 () Mutual funds industry body Amfi has requested the government to allow low cost debt-linked saving schemes, with tax benefits, to deepen bond market, and lower holding period in gold and commodity ETFs to one year from existing three years for LTCG purposes.
 In its Budget proposals to the Finance Ministry, the industry body has also demanded that the government recognise mutual funds (MFs) as specified long-term assets, qualifying for Long-Term Capital Gains (LTCG), as well as bring ULIPs of life insurance companies and equity MF schemes on par.
 The mutual fund body has also asked for dividend distribution tax (DDT) exemption for EPFO, NPS and insurance companies investing in MF schemes and pass-through status for income tax purpose to those Category III AIFs which make 65 per cent investments in listed equities.
 "Amfi's suggestions have been in the Budget proposal list for a few years. We are hoping this time our long pending submissions get addressed, which would help take the Indian MF industry not only to the next level of growth but also help in contributing to making economy stronger, especially with deepening of bond market, making long term availability of funds for infrastructure growth, and reducing the fiscal deficit by shifting investments from pure gold to gold ETFs," Amfi Chief Executive N S Venkatesh said.
 Some of the proposals are also aimed at bringing parity with comparable investment avenues and making mutual funds more retail investor friendly, he added.
 The Association of Mutual Funds in India (Amfi) said that mutual funds should be allowed to introduce low-cost, lower-risk tax-exemption-linked debt-linked savings schemes (DLSS) on the lines of equity linked saving schemes (ELSS).
 It further proposed that investments up to Rs 1.5 lakh under DLSS be eligible for tax benefit, subject to a lock in period of 5 years.
 At present, equity-linked savings schemes qualify for tax benefits under Section 80 CCC of the Income Tax Act for an investment limit of up to Rs 1.5 lakh in a fiscal year.
 In order to make gold and commodity ETFs more attractive, the industry body has proposed to lower the holding period for LTCG purposes from 3 years to 1 year, as is the case for listed debt securities.
 Besides, Amfi has requested clarity in respect of creation of segregated portfolio in mutual fund schemes, on capital gains tax treatment upon sale of mutual funds units with regard to the treatment of the units allotted consequent on segregation of portfolio.
 In addition, it has proposed that the threshold limit in equity oriented mutual fund schemes be restored to 50 per cent. Reducing the threshold limit of equities from 65 per cent to 50 per cent for being regarded as 'equity-oriented fund' would encourage more investors with lower risk appetite to invest in such funds.
 Amfi has also proposed that the definition of equity oriented funds be revised to include investment in Fund of Funds schemes, which invest predominantly in units of equity oriented mutual fund schemes. SP 
RVK

Amfi pitches for debt-linked saving schemes with tax benefits in Budget proposal

If you are going to buy shares for the first time, you can expect some respite when <a href="http://www.businessinsider.in/searchresult.cms?query=arun+jaitley&amp;sortorder=effectivedate">Finance Minister Arun Jaitley</a> announces <a href="http://www.businessinsider.in/searchresult.cms?query=budget+2017&amp;sortorder=effectivedate">Budget 2017</a> on Feb 1. 
 
In a bid to encourage more people to move towards <a href="http://www.businessinsider.in/searchresult.cms?query=stock+market&amp;sortorder=effectivedate">Indian stock markets</a>, Indian government may announce tax breaks for first time direct equity investors. As per several reports, it is also likely that Jaitley may announce a new scheme in this regard or tweak the existing Rajiv Gandhi Equity Savings Scheme (RGESS) for attracting investment. 
 
The new or modified scheme will be under Section 80 (C) plan that will be likely be announced in the budget for 2017-18. 
 
Jaitley may raise tax breaks offered on money in a pool of savings instruments such as fixed deposits, insurance premium and mutual funds from Rs 150,000 to above Rs 200,000 a year. 
 
Presently, households enjoyed tax breaks on equity-linked savings schemes (ELSS) of mutual funds within the overall Rs 1.5 lakh limit under Section 80C of the Income Tax (I-T) Act and under 80CCD for National Pension System contributions up to Rs 50,000 a year. 
 
Meanwhile, RGESS may be tweaked as the scheme has not many takers due to complexity. 
 
Only new or first time retail investors with an annual gross income of less than Rs.12 lakh are eligible to invest in the scheme. 
 
The scheme also comes in with lock-in period of three years, with a fixed lock-in during the first year followed by a flexible lock-in for subsequent two years.

First time share buyer? Expect more tax breaks in Budget 2017

Both Public Provident Fund (PPF) and Equity Linked Savings Scheme (ELSS) are saving schemes that are eligible for tax benefits. Hence investors are often confused on which one to choose among these two. Are they similar? No doubt PPF has been popular among the investors for so long. However, these days, ELSS seems to be picking up fast due to the higher returns it promises. In fact, it is important to know that there is nothing similar between these two investment vehicles beyond the tax benefits they carry. When you know the About PPF Public Provident Fund (PPF) is a savings scheme created by the government that assures guaranteed returns and some attractive tax benefits under Section 80C. The government revises the interest rates of this scheme during every quarter. For example, the interest rate for the current quarter Q 2 (July-September), FY-19 is fixed at 7.9%. About ELSS <keyword id="3832316" type="PERSON" weightage="20" keywordseo="Equity-Linked-Saving-Scheme">Equity Linked Saving Scheme</keyword> (ELSS) can be described as a type of <keyword id="6354820" type="DEFINITION" weightage="20" keywordseo="mutual-fund">mutual fund</keyword> that carries tax benefits under the section of 80C of the Income Tax Act, 1961. Currently, it has become immensely popular due to its high returns and the lowest lock-in period. PPF Features Low-Risk Since PPF is a government-backed savings scheme, it is considered as a safe investment option available in India. Since the capital and returns are safe, it is one of the most popular investment options. Tax Benefits Since the investments in PPF fall under the exempt-exempt-exempt (EEE) category, the PPF deposits are never taxed at any point. The investment up to a limit of 1.5 lakhs per annum, the monthly interest and the maturity amount is completely tax exempt. Lock-in Period Deposits in PPF are characterized by a mandatory lock-in period of 15 years. Nevertheless, it is possible to take a loan on PPF deposits starting from the 3rd to 6th financial year from the date of opening the account. From the 6th year, partial withdrawal is possible. Fixed Returns In an average, the investments in PPF have invited 8% interest over the past. Also since the government decides the interest rate during every quarter, PPF assures fixed returns. Investment and Withdrawal The minimum and maximum investment you can make in a PPF investment account is Rs 500 and Rs 1.5 lakhs respectively. In case of serious ailments, premature closure is allowed. Partial withdrawals are permitted from the 6th year. ELSS Features High Returns Studying the history, we find that ELSS has always assured one of the highest returns among the tax-saving instruments. In the past, it has generated about 11-14% returns in a time frame of 3-years and 5-years. However, since the returns under ELSS are market-linked, they are not market guaranteed. Tax Benefits Section 80C allows tax benefits on ELSS investments up to Rs. 1.5 lakhs per year. However, while PPF is tax-free during all stages, the gains from ELSS scheme is taxable if it exceeds Rs. 1 lakh in a given year. Lock-in period Among the different tax-saving investment options, ELSS comes with the lowest lock-in period of only 3 years. Hence it carries a high degree of liquidity. SIP Option An investor can start investing in ELSS with an amount as low as Rs. 500 per month through <keyword id="6359303" type="DEFINITION" weightage="20" keywordseo="systematic-investment-plan">Systematic Investment Plan</keyword>. Whenever convenient, you can either start or stop the SIP. How to choose between PPF and ELSS PPF suits investors who do not want to take risks and can afford the lock in period of 15 years. Those investors who want to take only moderate risk and want to earn a higher interest can go for ELSS.

Comparison between PPF and ELSS, which is better?

The countdown to meet our financial goals has begun. <keyword id="25456" type="ORGANIZATION" weightage="20" keywordseo="financial-planning">Financial planning</keyword> is usually not our most well-thought-out decision as often our primary focus is saving tax. And, though it should play a key role, just saving tax is not necessarily the best way to go about it. The constant need to save tax instead of planning finances methodically, often leads to lack of liquid funds in times of need. It is, therefore, critical that you strike a balance between your long-term and short-term goals. 
 
This new year, make your savings work double time: save tax and get best possible returns. Here, are a few financial instruments in which you can park your money for long-term investment and ensure quick access to funds, if required. 
 
1. <keyword id="114852" type="ORGANIZATION" weightage="20" keywordseo="Public-Provident-Fund">Public Provident Fund</keyword> (PPF): PPFs top every investor’s list, and they should. The Budget 2014-15 made this scheme even more attractive by increasing the annual investment limit to Rs 1.5 lakhs. This scheme is a safe investment option for all, whether salaried or self-employed. The downside, however, is that it is a long-term saving with a lock-in period of 15 years. Further, you can withdraw money from the fund from the 7th year onward and that too only 50% of the balance. 
 
2. National Savings Certificate (NSC): Post offices issue NSCs as a small savings scheme. You can invest in either 5-year or 10-year NSCs. One great advantage offered by NSCs is that there is no upper limit to the amount you want to invest, though tax benefits will be available on an amount of Rs 1.5 lakh or lower only. 
 
3. Unit-linked <keyword id="35450" type="COMPANY" weightage="20" keywordseo="insurance">Insurance</keyword> Plan (ULIP): It is a long-term savings scheme that doesn’t offer much flexibility or decision-making to the investor. You invest for a period of 10-12 years, with a lock-in period of 5 years. Although <keyword id="6362086" type="CITY" weightage="20" keywordseo="Ulips">ULIPs</keyword> allow you to switch between equity and debt, your profits depend on the financial expertise of your fund planner. On the upside, ULIPs provide the investor with a life cover. 
 
4. Equity-linked Savings Scheme (ELSS): It is flexible with respect to investment duration, with a lock-in period of three years. There is no maximum limit to the amount you can invest in an ELSS, and investment of up to Rs 1.5 lakhs offers tax benefits. One of the many benefits of an ELSS is that no tax is levied on withdrawing your investment after the lock-in period. 
 
5. National <keyword id="6354432" type="UNKNOWN" weightage="20" keywordseo="pension">Pension</keyword> Scheme (NPS): NPS is the cheapest market-linked retirement option as the annual fund management charges are a maximum of 0.25% of the amount invested. Your minimum investment criterion will vary according to the tier you are grouped in. You can invest in any one of the three types of NPS funds and divide your corpus according to your risk-taking ability. 
 
6. Post Office Time Deposit (POTD) scheme: It is primarily a small saving scheme, with the duration ranging from 1 year to 5 years. You can earn an interest of about 8.50%, depending upon your investment period. Though the interest is paid annually, it is compounded quarterly. Further, you can now exit the scheme after 6 months, which makes it a handy investment option. 
 
7. Banks’ Fixed Deposits (FDs): Banks offer 5-year FDs that serve the dual purpose of saving tax and investing money safely. You can invest a minimum of Rs 100 and a maximum of Rs 1.5 lakhs. Banks offer interest rate of 8%-9.75%, depending on the bank you choose. However, the interest earned on the fixed deposits is fully taxable. 
Plan now and save for that rainy day. 
 
 
 
(About the author: The article has been written by By Naveen Kukreja, Director, Paisabazaar.com) 
 
Image: Thinkstock

Your DIY For Optimizing Tax Savings and Financial Liquidity

We’re days away from the end of the financial year. There’s little time left to plan investments and save taxes. If you’ve clicked through to this article, it’s likely that you’ve fallen short on your tax-saving goals. 
 
You’re probably looking for a quick fix. You need to make an investment, save your taxes under Section 80 C, generate handsome returns—and you need to do all this without getting out of bed. 
 Worry not. Here’s an option for you: buy some <keyword id="103549" type="CITY" weightage="20" keywordseo="ELSS">ELSS</keyword> mutual funds. 
 
Introduction Equity Linked <keyword id="25450" type="UNKNOWN" weightage="20" keywordseo="savings">Savings</keyword> Schemes – ELSS – are diversified equity mutual funds. Your capital is invested in a variety of equity options in the stock market, allowing you to earn market-linked returns on your investments. 
 
Where To Buy 
Mutual funds can be bought from fund house branches, bank branches, agents, and distributors. Since you’re looking for a quick way out of your quagmire, you should go online. In this, you have two options: buy funds directly from the fund house website, or buy them from an online distributor. 
 
What To Buy 
There’s a plethora of ELSS mutual funds, and it’s not easy to decide which one to pick. Most fund houses offer at least one ELSS fund. There are plenty of mutual fund research and analysis websites that offer data on ELSS funds. You can access this data, look at parameters such as long-term returns, research rankings, management fees, investment objectives, etc. Ideally, you should consult experts before making this investment. 
 
How Much To Buy 
Like all mutual funds, ELSS funds can be bought as SIPs or lump sums. Since you’re looking to do a one-time investment to urgently save tax, you should be aware of your investment shortfall and invest up to that limit. You’re allowed to invest to save up to Rs. 1.5 lakh under Section 80 C through one or many of the investment options available, including ELSS funds. 
 
Risks 
ELSS funds are equity investments. Which means that your investment is subject to market risks and you should read all scheme documents carefully before investing. As markets rise and fall, so will your investment value. 
 
Returns 
That said, over the long term, ELSS funds have out-performed most small savings scheme such as PPF. As per the CRISIL - AMFI ELSS Fund Performance Index in December 2016, the ELSS fund category as a whole has generated annual returns of 3.35% in the last year, 16.64% in the preceding three years, 17.71% in five years, and 10.61% in 10 years. In case you find the markets tanking, stay calm, remain invested, and reap long-term, tax-free returns. 
 
Lock-In 
ELSS funds have a lock-in of three years. It means you cannot redeem units whose tenure has been less than three years. This has one significant benefit, which is… 
 
<keyword id="6383566" type="PERSON" weightage="20" keywordseo="Taxation">Taxation</keyword> 
Returns from ELSS funds are tax-free. ELSS funds are equity investments. Equity investments with a tenure longer than one year qualify as long-term investments, and therefore become exempt from capital gains tax. Since ELSS funds have a three-year lock-in, they are automatically tax-exempt. 
 
 
(The writer is CEO, BankBazaar.com)

Forgot to save taxes? Don’t panic. Here’s an investment option for you

New Delhi, Jan 21 () Mutual fund industry added 68 lakh folios in 2019 taking the total tally to 8.7 crore, which suggests investors' understanding about market risks associated with such schemes.
 However, the pace of growth in folio numbers dropped in 2019 as compared to preceding three years. Industry experts attributed the trend to decline in investors account in debt oriented schemes as they were spooked by credit events in fixed income market.
 Folios are numbers designated to individual investor accounts. An investor can have multiple folios.
 According to the data, the number of folios with 44 fund houses rose to 8.71 crore at the end of December 2019 from 8.03 crore at the end of December 2018, registering a gain of 68 lakh folios.
 In comparison, over 1.38 crore investor accounts were added in 2018, more than 1.36 crore in 2017, nearly 70 lakh in 2016 and close to 56 lakh in 2015, data available with markets regulator Sebi showed.
 Industry experts said the addition of folios indicates investors' understanding about market risks associated with the mutual fund schemes.
 The number of folios under equity and equity-linked saving schemes rose by 12.75 lakh to 6.25 crore at the end of December 2019, which is much lower than 1.2 crore added in the preceding year.
 Debt-oriented scheme folios count dropped by 43 lakh to 71 lakh. The number of investors' account stood at 1.13 crore.
 Assets under management (AUM) of the industry rose by over 13 per cent (Rs 3.15 lakh crore) to Rs 26.77 lakh crore at the end of December, up from Rs 23.62 lakh crore at the end of December 2018 on the back of measures taken by regulator Sebi for boosting investor confidence.
 Going ahead, the industry is expected to witness growth in the range of 17-18 per cent in this year and equity funds should see robust inflows as expectations are high about improved equity markets and a revival in economic growth, experts noted. SP RVK

Mutual funds add 68 lakh folios in 2019

New Delhi, Dec 10 () The mutual fund industry has added more than 2.6 lakh folios in November taking the total tally to 8.65 crore, which suggests investors' understanding about market risks associated with such schemes.
 In comparison, the industry had added 6 lakh folios in October, 3.45 lakh in September, 4.8 lakh in August and more than 10 lakh in July.
 Folios are numbers designated to individual investor accounts. An investor can have multiple folios.
 According to data from Association of Mutual Funds in India, the number of folios with 44 fund houses rose to 8,65,18,585 at the end of November from 8,62,56,880 in the end of October, registering a gain of 2,61,705 folios.
 Industry experts said the addition of folios indicates investors' understanding about market risks associated with the mutual fund schemes.
 However, the pace of growth in folio numbers has dropped last month compared to October mainly due to lower influx in equities
 Number of folios under the equity and equity-linked saving schemes rose by 1.2 lakh to 6.21 crore in November-end, which is much lower than 3 lakh added in the preceding month.
 The debt-oriented scheme folios count went up by 5.4 lakh to 70.12 lakh.
 Within the debt category, liquid funds continued to top the chart in terms of number of folios at 17.45 lakh, followed by low duration fund at 9.7 lakh fund houses.
 Mutual fund houses witnessed an overall inflow of Rs 54,419 crore last month as compared to Rs 1.33 lakh crore in October.
 Among debt-oriented schemes, overnight funds -- invest in securities with a maturity of one day-- received flows worth about Rs 20,650 crore, the highest among the fixed-income segment last month.
 Net inflows into equity mutual fund schemes dropped to Rs 1,690 crore in November from Rs 6,015 crore in the preceding month.
 The 44-player industry's assets under management (AUM) rose to an all time high of Rs 27.04 lakh crore by November end from Rs 26.33 lakh crore in October-end. SP SHW
SHW

Mutual funds add 2.6 lakh investors account in Nov, total tally reaches to 8.65 cr

10 best tax-saving investments

New Delhi, Jan 19 () Investors pumped in nearly Rs 75,000 crore in equity-oriented mutual fund schemes in 2019, a sharp plunge of 41 per cent from the preceding year, mainly hit by extreme market volatility amid slowing economic growth.
Experts, however, are of the view that equity schemes will attract investor interest this year as the market is expected to perform well.
"While volatility in the market may continue for some more time going forward, we believe investors will want to benefit from this volatility and use it to create and growth their wealth. As we expect industry inflows to rise, we believe that all categories of mutual funds including equity funds to see a steady rise in flows," said Ashwani Bhatia, MD and CEO at SBI Mutual Fund.
According to data with Association of Mutual funds in India (Amfi) equity and equity-linked saving schemes (ELSS) attracted an inflow of Rs 74,870 crore in 2019, much lower than Rs 1.2 lakh crore seen in 2018.
In 2017, such schemes had witnessed an impressive inflow of around Rs 1.33 lakh crore as compared to Rs 51,000 crore in 2016.
Equity schemes have seen a little bit of a slowdown in 2019 as compared to the past few years because of extremely volatile markets, L&amp;T Mutual Fund chief Kailash Kulkarni said.
The pace of inflows in equity funds tapered off towards the end of the year with the inflow in such schemes hitting a 41-month low of Rs 1,312 crore in November as investors did not see the index returns in their own funds. Besides, weakness in the mid and small-cap space dented the investor confidence, said Vidya Bala, co-founder of Primeinvestor.in.
Equity flows have two components -- systematic investment plan (SIP) and non-SIP. Flows through SIPs have consistently grown over the years and have touched more than Rs 8,000 crore on a monthly basis, while the non SIP flows are volatile based on the investor's need for money and view on the market.
Overall, fund houses have garnered Rs 82,453 crore through SIPs -- a preferred route for retail investors to invest in mutual funds as it helps them reduce market timing risk.
The industry added over 9.55 lakh SIP accounts each month in the year with an average SIP size of about Rs 2,850 per SIP account.
"SIPs have been the bedrock of equity flows and we think this will continue to the case in the coming year too. As and when there is are greater signs of economic turnaround, we can see equity flows surge further through lumpsum flows," Kaustubh Belapurkar, Director Manager Research at Morningstar Investment Adviser India said.
Kulkarni said, "SIP will continue to go from strength to strength and if you see a slight market rally between now and the end of 2020 you will start seeing more number of investors believing in and a word of mouth publicity in terms of how SIP benefits investors will ensure that the next set of investors come in to this facility".
The asset base of equity MFs stood at Rs 8.04 lakh crore at the end of December 2019 as compared to Rs 7.87 lakh crore in December-end 2018. SP
MKJ

Investment in equity MFs drops 41% to Rs 75,00 cr in 2019; slow economy takes a toll

New Delhi, Feb 12 () Investors pumped Rs 1.2 lakh crore into various mutual fund schemes in January, after pulling out a massive Rs 62,000 crore in the preceding month, primarily on account of infusion in liquid and overnight schemes. Mutual fund inflows will gather further momentum in the coming months, Union Asset Management Company CEO G Pradeepkumar said. According to data by the Association of Mutual Funds in India (Amfi), net inflow of Rs 1.2 lakh crore was witnessed in mutual fund schemes last month as compared to an outflow of Rs 61,810 crore in December. Fund managers attributed the growth in asset base to strong inflow of around Rs 1.09 lakh crore in debt-oriented schemes. Among debt-oriented schemes, liquid funds, with investments in cash assets such as treasury bills, certificates of deposit and commercial paper for shorter horizon, received flows worth about Rs 59,683 crore, the highest among the fixed-income segment last month. In addition, overnight funds, which invest in securities with maturity of one day, received inflow of about Rs 22,652 crore. "On the fixed-income side one of the noticeable trends is a shift away from liquid funds toward overnight funds. With the introduction of exit load in liquid funds and certain additional restrictions that will come into effect from April 1, 2020, we expect this trend to continue," Pradeepkumar said. The open-ended equity and equity-linked saving schemes witnessed an infusion of Rs 7,877 crore, while there was an outflow of Rs 330 crore in close-ended equity plans, taking total equity inflows to Rs 7,547 crore last month. In December, net inflows in such schemes stood at Rs 4,432 crore. Small-cap, mid-cap and large-cap funds saw inflows of Rs 1,073 crore, Rs 1,798 crore and Rs 1,154 crore, respectively, in January. It is interesting to note this flow is well spread between the category of funds such as large-cap, mid-cap and multi-cap, among others. During January 2020, Nifty Midcap 100 and Nifty Smallcap 100 rose 5.31 per cent and 6.71 per cent, respectively. "With overall sentiments improving on the back of softer crude oil prices and lower interest rates as also unconventional steps taken by RBI recently has led to expectations of further softening of interest rates. These factors should help to sustain the growth in equity markets in the near term," Pradeepkumar added. Nippon Life India Asset Management ED and CEO Sundeep Sikka said, "With the Union Budget 2020 and subsequent RBI policy leading several structural changes, we will continue to stay optimistic on the market outlook. The retail investors may continue investing in the markets through SIPs (systematic investment plans), while staying balanced in their investing approach between different asset classes". SPRVK

Mutual funds log Rs 1.2 lakh cr inflow in Jan on infusion in liquid schemes

Investment decisions must follow a careful analysis and informed knowledge so that we get the best results in line with our expectations. Here we compare between the two investment vehicles namely Systematic Investment Plan vs Public Provident Fund to understand which is better for investment. What do they mean to an investor? A Systematic Investment Plan or a SIP is a kind of <keyword id="6354820" type="DEFINITION" weightage="20" keywordseo="mutual-fund">mutual fund</keyword> investment. Under an SIP investment option, the investor subscribes to a given mutual fund through a pre-defined amount payable on a monthly or any other regular interval basis. Since the investors are buying units of the said mutual fund by paying a standard amount over a well-defined tenure, the investments will not be affected by the market volatility. A PPF investment is a conventional savings scheme introduced by the government of India under the 1968 Public Provident Fund Act. The objective of this investment is to enable people make savings with encouraging returns over a long period of time. Year on year, the government decides the rate of interest over this investment. PPF is a kind of long term investment with a 15 years tenure. The minimum and maximum amounts that can be invested in a PPF scheme is Rs 500 and Rs 1,50,000 respectively. How these two schemes compare Returns Since an SIP investment is done in mutual funds, the returns will depend on the given mutual fund’s performance. The returns on SIP will be as per the current market trends. The returns on PPF are calculated on an annual basis and are decided by the government. Purpose SIP investments are suitable for most people as they can satisfy short term, medium and also long term goals. They are deemed ideal for wealth creation. However, a PPF investment will suit only long term investments. It can be the best scheme for retirement benefit, education or marriage of children and not for other kinds of investment needs. Tax benefits Investments in SIP will invite both short term and long term capital gains tax. Nevertheless, investment in an equity linked savings scheme will enable you to claim deductions of up to Rs 1,50,000 under Section 80C of the Income Tax Act 1961. A PPF investment falls under Exempt, Exempt, Exempt (EEE) category that means the returns and also investments are tax free. Investment Tenure The investment tenure is flexible in case of SIP between 6 months and 1 to 20 years or more. The PPF scheme allows a minimum investment tenure of 15 years. After the maturity period, the investment can be extended for 5 more years. Liquidity SIP investment carries the highest degree of liquidity when it comes to withdrawals. You can get the entire mutual fund amount credited to your bank account linked with the plan within just 3 working days. From a PPF scheme, you can withdraw a partial amount only from the 6th year of investment. How to choose between them The choice of whether an SIP or PPF investment scheme will suit you depends on your investment goals. Decide if you are looking for a risk free long term investment in a PPF plan or you would expect higher returns that carry some risks and more liquidity in a SIP plan.

You Searched For "equity linked saving schemes" and got 12 results

Looking to save tax? Give an ELSS fund a chance – For tax savings & wealth creation

Adhil Shetty

Amfi pitches for debt-linked saving schemes with tax benefits in Budget proposal

PTI

First time share buyer? Expect more tax breaks in Budget 2017

BI India Bureau

Comparison between PPF and ELSS, which is better?

BI India Bureau

Your DIY For Optimizing Tax Savings and Financial Liquidity

Guest Author

Forgot to save taxes? Don’t panic. Here’s an investment option for you

Adhil Shetty

Mutual funds add 68 lakh folios in 2019

PTI

Mutual funds add 2.6 lakh investors account in Nov, total tally reaches to 8.65 cr

PTI

10 best tax-saving investments

Economic Times

Investment in equity MFs drops 41% to Rs 75,00 cr in 2019; slow economy takes a toll

PTI

Mutual funds log Rs 1.2 lakh cr inflow in Jan on infusion in liquid schemes

PTI

PPF Vs SIP: Which is better for investment?

BI India Bureau

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