Page 17 - HDFC Bank | Take the cut out of your tax cut

 

 

 

 

 

Page 17 - HDFC Bank | Take the cut out of your tax cut
P. 17

Mutual Funds



           ELSS – tax saving coupled with higher potential returns.
           Tax planning is a part of overall financial planning to achieve long term goals. Choosing the right investment option is the
           key to save tax and reap maximum benefits of long term investments. Investing in Equity Linked Savings Schemes (ELSS)
           can help an individual to save tax under Section 80C. As per Section 80C of the Income Tax Act, qualifying investments up
           to a maximum of Rs. 150,000/- are deductible from total income of the individual. There are fixed income options available
           under Section 80C, but they may not be able to provide returns commensurate to beat the inflation. This is where ELSS -
           Equity Linked Savings Schemes come into the picture, however these schemes are more volatile compared to fixed income
           options. Moreover, past returns cannot be taken as an indicator of future performance.

           Comparison of ELSS vs other Tax Savings Instrument.


            Particulars                                     PPF**               NSC**          ELSS

            Lock-in period - Years                          15                  5              3

            Minimum Investment (Rs.)                        500                 1000           500

            Maximum Investment for Tax Benefit (Rs.)        1,50,000            1,50,000       1,50,000


            Risk                                            Low Risk            Low Risk       Very High

            Returns                                         7.10%^              6.80%^         19.98%#

            Interest Income / Dividend                      Tax-Free            Taxable        Taxable

            #Returns (%) are historical for last 5 years (CAGR) as on 31 October 2022. Broad returns are for recommended ELSS Funds. Source for entire
            data for ELSS stated above is ICRA Analytics Ltd.
            (For Disclaimer of ICRA Analytics Ltd, refer https://icraanalytics.com/home/disclaimer)
            ^Source: http://indiapost.gov.in.
            Rates incorporated compounding wherever applicable.
            ** Rates for PPF and NSC are applicable from 1st April 2020.
            Past returns cannot be taken as an indicator of future performance.

           ELSS Funds come with a host of benefits along with tax saving.

           ELSS is diversified equity mutual fund that provides tax benefits along with long term capital appreciation.

           ELSS has the shortest lock-in period of 3 years, as compared to other options.
           ELSS helps in tax planning as well as provides scope to benefit from the long term growth potential of equities.



















                                                                                                              17
                   *Based on Retail Loan book size (excluding mortgages). Source: Annual Reports FY 20-21 and No.1 on market capitalisation based on BSE data as on 31st Dec, 2021
   12   13   14   15   16   17   18   19   20   21   22