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

Surrender ULPPs

  ICICI Pru LifeTime and ICICI Pru Lifestage are Unit Linked Pension Plans. Such insurance linked retirement plans are neither good investments nor do they offer sufficient insurance cover. As you can see, these have turned out to be bad deals. In the Lifetime plan, the fund value is not even equal to the total premiums that you have paid and in the Lifestage plan your return is just about 6% which is quite low. The mortality charges are as per your age which is why they have increased. Moreover, once these plans matures, you will have to compulsorily opt for annuity (regular income) and the annuity rates are generally modest. Assuming these plans mature in the next one year, it will be wise to surrender the plan now and curb your future commitments.   Before you choose to buy a term plan, you have to consider a few points. You need to insure yourself, only during the time you are working and your family is financially dependent on you. At the age of 59, not all insurance companies w...
Read more

ICICI Pru Constant Maturity Gilt dividend

Invest ICICI Prudential Constant Maturity Gilt Fund Online ICICI Prudential Mutual Fund   has announced dividend under the following schemes: Scheme Dividend ( R /unit) ICICI Pru Constant Maturity Gilt-DQ 0.26543239 ICICI Pru Constant Maturity Gilt Direct-DQ 0.27171609 ICICI Pru Q Interval Plan I-D 0.10617296 ICICI Pru Q Interval Plan I Direct-D 0.10703967 ICICI Pru Q Interval Plan I Ret-D 0.10617296             The record date has been fixed as June 13, 2016.   ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds Top 10 Tax Saver Mutual Funds to invest in India for 2016 Best 10 ELSS Mutual Funds in india for 2016 1. BNP Paribas Long Term Equity Fund 2. Axis Tax Saver Fund 3. Franklin India TaxShield 4. ICICI Prudential Long Term Equity Fund 5. IDFC Tax Advantage (ELSS) Fund 6. Birla Sun Life Tax Relief 96 7. DSP BlackRock Tax Saver Fund 8. Reliance Tax Saver (ELSS) ...
Read more

SBI MAGNUM MIDCAP ONLINE

Invest SBI MAGNUM MIDCAP ONLINE   SBI MAGNUM MIDCAP fund didn't fare well in its initial years but, in recent years, has steadily improved its performance under the capable hands of its current fund manager. Although investing predominantly in mid-cap stocks, the average market capitalisation of its portfolio is lower than other category peers.   Although the stock selection approach is mostly bottom-up , the fund manager doesn't shy away from taking bold sector bets , as is reflected in its large exposure to the healthcare sector. She is equally adept at handling performance across market cycles--the fund has captured more of the upside during market upticks and contained the downside during downturns in a better manner than its peers.   Given its superior risk-reward equation, the fund is a worthy pick in its category.     ----------------------------------------------- Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing EL...
Read more

Sundaram Mutual Fund new plan Sundaram Fixed Term Plan CJ

Sundaram Mutual Fund has announced the launch of a new fund named as Sundaram Fixed Term Plan CJ. The new issue will be closed for subscription on January 30. --------------------------------------------- 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 are: 1. HDFC TaxSaver 2. ICICI Prudential Tax Plan 3. DSP BlackRock Tax Saver Fund 4. Birla Sun Life Tax Relief '96 5. Reliance Tax Saver (ELSS) Fund 6. IDFC Tax Advantage (ELSS) Fund 7. SBI Magnum Tax Gain Scheme 1993 8. Sundaram Tax Saver   -...
Read more

Group Health Insurance

Buy Group Health Insurance Online   For Human Resources, the biggest challenge today is to decide whether medical benefits should be offered to employees or not, what type of plans should be offered, what will be the cost and how will the cost be split between employees and employer. Well, most of these are subjective and would depend on a lot of factors including company size, average employee salary, etc. However, this article will give you a fair idea on how you should go about deciding these factors: 1. Why offer group health insurance benefit to employees : Studies have proved that retention rates among employers offering GHI are much higher than the ones who are not offering. Moreover, the cost of providing this benefit as a percentage of salary is very low as compared to the perceived value. As an example, say if average salary of an employee in your organization is 4 LPA. If you decide to offer a health insurance benefit to him for a Sum insured of ...
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