GET DUAL BENEFIT of

WEALTH CREATION & Tax Saving

WithELSS

Invest Rs.1.5 lakhs & Save Tax upto Rs. 46,350/-* u/s 80C

Start Investing Now

(* For F.Y. 2017-18 & for Individual who comes under the highest tax bracket)

ELSS ADVANTAGES

TAX FREE RETURNS
TAX FREE RETURNS

Income/returns in the form of Dividends or Capital Gains (on redemption)
are totally tax free*

* Till 31st March 2018
LOWER LOCK IN PERIOD
LOWEST LOCK IN PERIOD

In comparison to other investment avenues available u/s 80C of the income tax act, ELSS has the shortest lock in period of 3 years

BETTER RETURN
SUPERIOR RETURN

Lock in period of 3 years, provides fund manager an opportunity to invest funds for long term without worry about sudden redemption pressures

ELSS V/S OTHER TAX SAVING PRODUCTS

Particulars PPF NSC (5 Yr Lock-in) Tax Saving FDs Post Office Time Deposits ELSS
Lock-In Period (Yrs.) 15 5 5 5 3
Rate of Interest (%) 7.80% 7.80% 6.50%^ 7.10% Linked to Market
Rates Applicable From 1st Oct 2017 1st Oct 2017 With Effect From 01/11/2017 1st Oct 2017 --
Rates Applicable Till 31st Dec 2017 31st Dec 2017 31st Dec 2017 --
Compounding Yearly Yearly Quarterly Quarterly --
Taxation on Returns Interest is Tax Free Interest is Taxable Interest is Taxable Interest is Taxable Dividend & Cap Gains are Exempt*

^ Rate offered by SBI Tax Saving Scheme FD
* Till 31st March 2018
Note:

  • As per Government Notification, interest rates of Small Saving Schemes are to be recalibrated on a Quarterly Basis with effect from 1st April 2016 to align the small saving interest rates with the market rates of the relevant Govt. Securities.
  • Further subscription to 10 Yr lock-in National Savings Certificate with 8.80% interest rate has been discontinued since 20th December 2015
  • For 5 yr National Saving Certificate, the Compounding frequency has been changed from Half-Yearly to Yearly from 1st April 2016

ELSS still be a better proposition after reintroduction of LTCG tax

Wealth created in ELSS schemes (before considering LTCG tax) & PPF

Scheme Name 1 Year 2 Years 3 Year 5 Years 7 Year 10 Years 12 Year 15 Years
CAPITAL INVESTED
Rs. 1 Lac Rs. 2 Lac Rs. 3 Lac Rs. 5 Lac Rs. 7 Lac Rs. 10 Lac Rs. 12 Lac Rs. 15 Lac
RETURNS GENERATED FROM VARIOUS ELSS SCHEMES (In Rs. Lacs)
Maximum 1,44,959 3,12,293 4,87,554 9,99,615 16,86,021 31,91,846 42,28,673 95,13,361
Minimum 1,22,095 2,61,751 3,92,879 8,26,677 13,06,275 22,22,427 28,34,352 51,88,219
Average 131,260 286,761 429,971 908,299 1,487,340 2,661,613 3,457,869 7,772,090
S&P BSE Sensex 1,30,044 2,74,652 3,97,892 7,53,987 11,59,397 19,64,665 25,82,455 48,68,973
PPF Calculated
@ Actual Rates
1,07,770 2,24,376 3,51,124 6,38,686 9,77,777 15,95,387 20,93,929 30,01,902

The above table shows the value of Rs. 1 Lac invested in PPF, Sensex and various ELSS Schemes as on 31st January of every year. (Valuation Date : 31st Jan 2018)

Note: Amount assumed Rs. 1 Lac in PPF & ELSS. However, investment amount per year has been increased from Rs. 1 Lac to Rs. 1.5 Lacs since 22nd August 2014 in PPF and ELSS.

Comparison of Post tax returns generated by ELSS & PPF

Years Invested Amount Average Valuation LTCG LTCG Exemption limit LTCG after exemption LTCG after exemption Post tax value of ELSS funds Post Tax CAGR Returns (%) Pre Tax CAGR Returns (%) PPF value Post Tax CAGR Returns (%)
1 Year 100,000 131,260 31,260 100,000 - - 1,31,260 31.26 31.26 1,08,035 8.04
2 Year 200,000 286,761 86,761 100,000 - - 2,86,761 26.54 26.57 2,25,029 8.12
3 Year 300,000 429,791 129,791 100,000 29,791 2,979 4,26,812 18.68 19.09 3,52,199 8.23
5 Year 500,000 908,299 408,299 100,000 308,299 30,830 8,77,469 19.36 20.61 6,40,737 8.38
7 Year 700,000 1,487,340 787,340 100,000 687,340 68,734 14,18,606 17.73 18.95 9,80,783 8.43
10 Year 1,000,000 2,661,613 1,661,613 100,000 1,561,613 156,161 25,05,452 16.21 17.27 15,99,911 8.39
12 Year 1,200,000 3,457,869 2,257,869 100,000 2,157,869 215,787 32,42,082 14.59 15.51 20,99,678 8.35
15 Year 1,500,000 7,772,090 6,272,090 100,000 6,172,090 617,209 71,54,881 17.93 18.84 30,10,291 8.29

In the above table we have assumed that the amount invested in ELSS funds generates “Average” return for the investor. Even after considering LTCG tax @ 10% on ELSS, returns generated by ELSS funds are still much higher compared to returns generated by PPF.