Skip to main content

Watch RGESS returns for 2 years before Invest

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

Meanwhile, it's better to invest in equity mutual funds with established track record

THE government has announced Rajiv Gandhi Equity Savings Scheme (RGESS) with an objective of encouraging flow of savings of small investors in domestic capital market.

Eligible investors will get an additional tax benefit of up to Rs 5,150 under section 80CCG by investing up to Rs 50,000 in RGESS eligible securities and mutual fund schemes.

This benefit is over and above the benefits available under section 80C.

Deduction under section 80CCG is available on 50 per cent of the amount invested. The benefit is in addition to deduction available under section section 80C. For example, if one invests Rs 50,000 under RGESS, the amount eligible for tax deduction from his income will be Rs 25,000. If one invest Rs 40,000 under RGESS, the amount eligible for tax deduction will be Rs 20,000. So he may save about Rs 2,500, Rs 5,000 and Rs 7,500 for 10 per cent, 20 per cent and 30 per cent income tax slabs, respectively, under this scheme.

Mutual fund houses have lined up exclusive schemes that would invest in RGESS-eligible securities.

But do RGESS schemes, which do not have any track record of performance, make sense for first-time equity investors, regardless of the small tax benefit? Or whether investors should forego the tax benefit and stick to investing in equity funds with proven track record? New equity investors earlier used to subscribe to equity-linked saving schemes (ELSS) of mutual funds for an equity exposure and tax benefits it provides under section 80C.

Due to retail investors' interest in equity investment hitting a low, the government has given tax exemption through RGESS to make equity investing look attractive to common man.

The return given by RGESS after three years will depend on same factors as an equity fund, but the fund performance may vary due to RGESS fund manager's performance.

Smaller fund size may also put constraints on the fund's performance in the initial three years.

In RGESS, eligible investors are those first-time equity investors whose taxable annual income is less than Rs 10 lakh.

Equity funds with 10year track record against RGESS with no proven track record have given return of close to 25-30 per cent.

Schemes like HDFC Top 200 by HDFC Mutual Fund has given a 10-year return of 29.18 per cent and Reliance Growth Fund a return of 31.79 per cent.

The RGESS funds announced so far are either index-based funds or equity funds. Index-based fund options include SBI Sensex ETF – an exchange

traded fund (ETF) tracking BSE Sensex by SBI Mutual Fund and UTI RGESS Fund – a threeyear close-ended index fund tracking NSE's Nifty by UTI Mutual Fund.

Quantum Index Fund from Quantum Mutual Fund also qualifies under RGESS, Quantum Mutual Fund said in a statement.

It is an open-ended ETF tracking S&P CNX Nifty (Nifty), which is diversified across 50 stocks.

Jimmy Patel, CEO, Quantum Mutual Fund, said, "For a new investor, investing in an index fund may be a good option.

These funds invest in stocks of companies in such a way that it has an index as an underlying security. It follows passive investment strategy, a financial strategy in which a fund manager invests in accordance with a pre-determined strategy

that doesn't involve any forecasting. The idea is to minimise investing fees and to avoid the adverse consequences of failing to correctly anticipate the future." RGESS equity fund options include DSP BlackRock Mutual Fund's DSP BR RGESS Series 1 – a three-year close-ended equity fund – and IDBI Mutual Fund's IDBI RGESS Series 1 Plan A – a threeyear close-ended equity fund.

Investors should take a call on RGESS after seeing the performance of the fund in first two years and meanwhile invest in an equity fund with an established track record.

Even ELSS schemes would be good for investment as they would still enjoy the tax benefit and also give good returns.

Sundaram Tax Saver Fund from Sundaram Mutual Fund has given a return of 18.8 per cent since inception in November 1999.

Still if somebody wants to invest in new RGESS scheme, the index-based funds would be much better against the actively managed equity funds because index returns are in line with market returns, whereas, equity fund returns could be much better or much worse.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax PlanInvest Online
  2. HDFC TaxSaverInvest Online
  3. DSP BlackRock Tax Saver FundInvest Online
  4. Reliance Tax Saver (ELSS) FundInvest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) FundInvest Online
  7. SBI Magnum Tax Gain Scheme 1993Invest Online
  8. Sundaram Tax SaverInvest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFundsInvest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

Mirae Asset Healthcare Fund

Best SIP Funds to Invest Online   Mirae Asset Global Investments (India) has launched Mirae Asset Healthcare Fund. The NFO of the fund will be open from June 11, 2018 to June 25, 2018. Mirae Asset Healthcare Fund is an open-ended equity scheme investing in healthcare and allied sectors. The scheme will invest in Indian equities and equity related securities of companies that are likely to benefit either directly or indirectly from healthcare and allied sectors. The investment strategy of this scheme aims to maintain a concentrated portfolio of 30-40 stocks. Healthcare is a broad secular theme that includes pharma, hospitals, diagnostics, insurance and other allied sectors. The fund will have the flexibility to invest across markets capitalization and style in selecting investment opportunities within this theme. Neelesh Surana and Vrijesh Kasera will manage this fund. In a press release, Swarup Mohanty, CEO, Mirae Asset Global Inves...
Read more

How to Decide your asset allocation with Mutual Funds?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) How to Decide your asset allocation ? The funds that base their equity allocation on market valuation have given stable returns in the past. Pick these if you are a buy-and-forget investor. Small investors are often victims of greed and fear. When markets are rising, greed makes the small investor increase his exposure to stocks. And when stocks crash to low levels, fear makes him redeem his investments. But there are a few funds that avoid this risk by continuously changing the asset mix of their portfolios. Their allocation to equity is not based on the fund manager's outlook for the market, but on its valuations. Our top pick is the Franklin Templeton Dynamic PE Ratio Fund, a fund of funds that divides its corpus between two schemes from the same fund house-the...
Read more

Reliance Regular Savings Fund - Debt Option

Reliance Regular Savings Fund - Invest Online     The scheme aims to generate optimal returns consistent with moderate levels of risk. It will invest atleast 65 per cent of its assets in debt instruments with maturity of more than 1 year and the rest in money market instruments (including cash or call money and reverse repo) and debentures with maturity of less than 1 year. The exposure in government securities will generally not exceed 50 percent of the assets. The fund uses a mix of relatively low portfolio duration with active investments in higher-yielding corporate bonds. It does not take aggressive duration calls but tries to improve returns by cherry-picking corporate bonds. This is reflected in the fund's returns matching the category and benchmark for five years - at 8.4 per cent - but lagging behind the category during a raging bull market in bonds in the last one year. The fund has been a consistent but not chart-topping performer in the income category. Despite its ...
Read more

How to generate a UAN Online

Best SIP Funds Online   In order to make Employees' Provident Fund (EPF) accounts portable, the Employees' Provident Fund Organisation (EPFO) had launched the facility of Universal Account Number (UAN ) in 2014. Having a UAN is now mandatory if you have an EPF account and are contributing to it. So far, you got this number from your employer and every time you changed jobs, you had to furnish this number to the new employer.  However, in order to make it easier for you to get a UAN , and without your employer's intervention, the EPFO now allows you to go online and generate a UAN on your own. This facility can be used by freshers, or new employees, who are joining the workforce as well as by employees who have older EPF accounts but do not have a UAN as yet. As a new employee, you can simply generate a UAN and provide the number to your employer at the time of joining, when you need to fill up forms for your EPF contribution. As per a circula...
Read more

Income Tax Basics for beginners

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Tax is a compulsory payment made to the Government, but there are ways to optimise it   Income tax is an instrument used by the government to achieve its social and economic objectives. Simply put, tax is duty or tariff that income earning individuals pay to the Government in exchange of certain benefits such as law and order, healthcare, education and a lot more. With proper planning, your tax liability can be reduced and optimised effectively, leaving you with a greater share of your income in your hands than being paid out as tax. Income earned in the twelve months contained in the period from 1st April to 31st March (Financial Year) is taken into account when calculating income tax. Under the Income Tax Act this period is called the previous year.   ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now