What is DSP Tax Saver Fund?
DSP Tax Saver Fund is an open-ended ELSS equity-linked savings scheme,rnwhich provides tax benefits under section 80C of the Income Tax Act, 1961. ELSSrnfund (Equity Linked Savings Scheme) is a mutual fund scheme, where tax deductionrnfrom total income is available. Individuals who seek income tax deduction canrnsave up to a lakh every year by investing in this tax-saver fund.
With DSP, the lock-in period is a minimum of three years, but like inrnany other equity model, it is advisable to stay invested for at least 5 yearsrnto reap maximum benefits.
Click here to invest in DSP Tax Saver Fundrnin easy steps
Understanding ELSS:
ELSS stands forrnEquity Linked Savings Scheme and it primarily invests in equity and equityrnrelated securities of corporates. This scheme offers a deduction in the totalrnincome tax paid by the investors.
The returns are much higher than most investment in ELSS.
Portfolio:
A portfolio is arncollection of all the financial investments you own, such as stocks, bonds,rncommodities, cash, and cash equivalents. In this, the cash equivalents includernclosed-end funds and exchange traded funds (ETFs). A portfolio contains a widernrange of assets such as art, real estate, and private investments. It alsorncomprises your details such as student loans and credit card balance.rnMaintaining a diverse portfolio is key to making great investments.
Portfolio composition:
An ideal assetrnallocation is the mixture of investments, which range from most aggressive tornthe safest. The key concept is to have that which returns what you want overrnthe given period of time. The composition of your asset can include stocks,rnmoney market securities, cash, or bonds, and how much you invest in eachrncategory depends on your available time and risk tolerance.
Each asset class has its own level of return and risk. For this reason,rnthe investors must consider their individual risk tolerance, investmentrnobjectives, time bracket, and their money available to invest as the basis forrntheir portfolio composition. All these aspects are important as the investorsrnmust look to create an optimal portfolio that serves their needs.
For instance, an investor with a long time bracket and bigger sums torninvest might feel comfortable with high-risk, high-return options. On the otherrnhand, investors with shorter time brackets and small sum of money may preferrnlow-risk, low-return assets.
Frequently asked questions:
A) Does DSP offer tax benefits under 80C?
Yes. DSP offers tax benefits up to Rs. 1.5 Lakh.
B) Will my profits on withdrawal be tax free?
Yes. Long termrncapital gains exceed Rs 1 lakh in DSP. Any investment that is made on or afterrnApril 1, 2018 is taxable at the rate of 10%.
C) What would be my predominant asset class exposure?
Equity would be thernpredominant asset class. In ELSS, the exposure to equity is at least 80% of thernportfolio.
D) Does it offer transparency?
Yes. DSP disclosesrnthe portfolio every month; the NAV is also disclosed daily.
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