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Aditya Birla Sun Life AMC Limited

Aditya Birla Sun Life AMC Limited

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    Aditya Birla Sun Life AMC Limited

    All you need to know about Aditya Birla Sun Life Tax Relief’96 Fund

    Dec 12, 2022
    5 min
    4 Rating

    A quick introduction

    Aditya Birla Sun Life Tax Relief ’96 Fund is an equity oriented mutual fund that qualifies for tax deduction u/s 80C of the Income tax Act (up to INR 1,50,000).

    It thus falls under the ‘Equity Linked Savings Scheme’ (ELSS) category of mutual funds.

    Where does it invest?

    • It invests a minimum of 80% of its net assets into equity and equity related instruments. The balance up to 20% may be invested in debt and money market instruments.

    • The fund manager is free to invest in stocks across large, mid and small cap categories.

    • Follows a combination of top-down and bottom-up approach to identify stocks which are profitable, scalable and sustainable to maximise investor return over the long-term.

      • Key Fund facts

    • Lock-in period

      Investments in this fund are subject to a lock-in period of 3 years from the date of investment.

    • Minimum investment

      Investment in this fund can be started with as little as INR 500. An SIP in this fund must have a minimum of 6 instalments of at least INR 500 each.

    • No entry or exit load is charged

    • Fund Manager

      The fund is managed by Mr. Atul Penkar, Mr. Dhaval Gala and Mr. Dhaval Joshi

    What's in it for you?

    • Gives you a deduction of up to INR 1,50,000 annually from your taxable income. This can amount to an annual tax saving of up to INR 64,1161

      Disclaimer: Tax saving of INR 64,116 is calculated assuming that the qualifying amount of deduction is INR 1.5 lakhs and investor falls into highest tax slab (i.e., 30% plus maximum surcharge of 37% and education cess of 4%). Please note that savings mentioned above are based on general provisions of the Income tax act, 1961 and investors are advised to consult their tax advisors to determine tax benefits applicable to them. Amount mentioned above may undergo a change if assumptions specified herein do not hold good.

    • As the fund invests predominantly in equity, it offers you the potential of long-term capital growth for your investment.

    Tax consequences

    • Qualifying as an equity-oriented fund, the fund has the benefit of favourable tax regime.

    • Gains on redemptions from the fund qualify as long-term capital gains. (since investment must be held for a minimum of 3 years)

    • These gains are taxable at a beneficial and lower rate of 10%; where gains of such nature exceed INR 1,00,000 in the year. If gains are below INR 1,00,000 in the year they are not taxed.

    What makes it better than other tax-saving investment options?

    • Lower lock-in period of 3 years, as compared to other tax saving options. Tax saving FDs have lock-in of 5 years, PF has lock-in of 15 years and so on.

    • Greater return potential as linked to equity

    • Tax efficiency – gains subject to lower tax rate of 10%

    How can you invest?

    Investments can be made either through a ‘Direct plan’ or a ‘Regular plan’

    • Direct plan – investments are made directly with the fund house i.e.: Aditya Birla Sun Life Mutual Fund. You can get benefit of a lower expense ratio when subscribing through a direct plan.

    • Regular plan – investments can be made through a distributor or your broker.

    Investing options

    • Growth option or IDCW option

      If investors opt for growth option, the returns earned by the fund are re-invested in the fund itself. Thus, the NAV of the fund grows as returns are earned. Investors can get a lumpsum of their investment plus returns when they redeem investments under the growth option.

      Under IDCW (Income distribution cum Withdrawal) option, the returns earned by the fund are periodically distributed to investors in the form of dividend. Thus, investors can earn returns through the duration of the fund under this option. The NAV of IDCW option fund is lower than that of the growth option fund.

    • Convenient investing options such as SIP/STP

      Apart from lumpsum investors, investors can also invest in Aditya Birla Sun Life Tax Relief ’96 Fund through SIP route. When opting for SIP route, investors can systematically and periodically invest pre-determined sums of money in the fund at pre-determined intervals.

    Aditya Birla Sun Life Tax Relief 96 Fund

    (An open ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit)

    This product is suitable for investors who are seeking*

    • Long term capital growth
    • Investments in equity and equity related securities, with tax benefit under section 80C, subject to eligibility

     

    *Investors should consult their financial advisers if in doubt whether the product is suitable for them

    Mutual Fund investments are subject to market risks, read all scheme related documents carefully.