Bandhan ELSS Tax Saver Fund - Direct Plan
An open ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit
What are Tax Saving Mutual Funds?
We've all been there—tax season hits and the scramble to save on taxes begins. But what if you could do more than just save? What if you could strategically invest to reduce your tax burden and aim to grow your wealth? Tax-saving mutual funds, also known as Equity Linked Saving Schemes (ELSS), offer this unique opportunity.
As their name suggests, these mutual funds offer the benefit of tax savings. ELSS funds are tax-saving mutual funds under Section 80C of the Income Tax Act, 1961. By investing in ELSS schemes, you can claim a tax deduction of up to ₹1,50,000 under the old tax regime. You can invest more than ₹1,50,000, but only the first ₹1,50,000 will qualify for tax benefits under Section 80C.
What are tax-saving mutual funds, and how are they different from equity mutual funds?
The key differences are the lock-in period and tax advantages. ELSS funds have a mandatory 3-year lock-in period, while regular equity mutual funds have no fixed lock-in period. With tax-saving mutual funds like ELSS, you can claim a deduction of up to ₹1,50,000 under Section 80C. Regular equity mutual funds do not offer this tax benefit.
- Min Investment 500
- Min SIP Amount 500
- Exit Load
Nil
Scheme is suitable for a minimum investment horizon of more than 3 years
Tier 1 Benchmark : BSE 500 TRIAlternate Benchmark : Nifty 50 TRI
- Performance
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Performance as on 31st October 2024
| Scheme Names | CAGR Returns (%) | Current value of Investment of 10,000 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 year | 3 year | 5 year | 10 year | 26/12/2008 Since inception | 1 year | 3 year | 5 year | 10 year | 26/12/2008 Since inception | |
| Bandhan ELSS Tax saver Fund - Regular Plan - Growth | 29.56 | 15.58 | 22.57 | 15.98 | 18.63 | 12,965 | 15,457 | 27,692 | 44,098 | 1,50,118 |
| 35.79 | 15.64 | 19.83 | 14.34 | 17.40 | 13,590 | 15,483 | 24,731 | 38,233 | 1,27,279 | |
| 28.30 | 12.35 | 16.61 | 12.62 | 15.81 | 12,839 | 14,195 | 21,582 | 32,844 | 1,02,463 | |
| ^ Tier 1 Benchmark | ^^ Alternate Benchmark | ^^^ Tier 2 Benchmark | ||||||||||
This fund is managed by Mr. Daylynn Pinto (w.e.f 20/10/2016)
View fund performance of other funds managed by Mr. Daylynn Pinto
Past performance may or may not be sustained in future.
Regular and Direct Plans have different expense structure. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission expenses etc.
Taxation:
For taxation, please refer the link : https://bit.ly/46xQzi1
Bandhan ELSS Tax Saver Fund
(Scheme Risk-o-meter)
BSE 500 TRI
(Tier 1 Benchmark Risk-o-meter)
This product is suitable for investors who are seeking* :
- To create wealth over long term.
- Investment predominantly in Equity and Equity related securities with income tax benefit u/s 80C and 3 years lock-in.
Who Should Invest in ELSS Mutual Funds?
Investing in ELSS funds offers tax benefits along with the opportunity for wealth creation. ELSS schemes are suitable for taxpayers willing to take on the risks associated with equity investments. While ELSS funds may offer high returns in the long term, they are subject to market and liquidity risks, and returns are not guaranteed.
Tax saving mutual funds like ELSS mutual funds are suitable for individuals with a regular source of income, such as salaried professionals, who need to make tax-saving investments every year.
ELSS schemes are ideal for individuals looking to create long-term wealth through investments in equity and equity-related securities, while also benefiting from tax savings under Section 80C. The investment comes with a mandatory 3-year lock-in period.
FAQs on ELSS Tax Saver Funds
How risky is an ELSS fund?
ELSS tax saver funds are high-risk-return investment and do not offer guaranteed returns. It is suitable for individuals who are looking to save tax and want the opportunity to earn higher returns in the long term.
How to withdraw mutual funds before the locking period?
There is no option to withdraw ELSS funds before completion of the lock-in period. The investor can raise a request for redemption only after completion of the lock-in period.
What is the lock-in period for tax saving mutual fund?
The lock-in period for tax saving mutual fund is three years. Investments in tax saving mutual fund cannot be withdrawn - partially or wholly, before the completion of three years.
Who should not invest in ELSS?
ELSS funds are ideal for long-term wealth creation. Investors seeking short term gains should opt for investments other than ELSS.
Is demat required for ELSS?
No, a demat account is not required for investing in an ELSS fund. You can invest in mutual funds online directly through the fund's website or through a certified mutual fund advisor.
Is ELSS good for the long-term?
ELSS schemes are suitable for a long-term investment. It's ideal for investors who are looking for high-risk-returns investments i.e. those who are seeking high returns in the long term. Additionally, ELSS schemes offer tax benefits under section 80C of Income Tax Act, 1961.
What happens if I don't withdraw from ELSS after 3 years?
After the lock-in period of three years, your investment in an ELSS mutual fund can remain as is and has the potential to generate returns till the time you are invested in the fund. You can continue to invest in this scheme even after the completion of the lock-in period.
Can I invest in ELSS monthly?
Yes, you can invest in ELSS tax saver funds monthly. The minimum amount for monthly investment is ₹500. However, the minimum investment tenure is three years and tenure is applicable on FIFO basis for each SIP instalment.
Which Mutual Fund scheme is eligible for tax saving under 80C of Income Tax Act, 1961?
Equity-linked savings scheme or ELSS is a tax-saving investment under Section 80C of Income Tax Act, 1961. They provide the dual benefit of wealth building and tax saving.
How does ELSS differ from PPF?
Section 80C of the Income Tax Act 1961 offers similar deductions for Public Provident Fund and ELSS Mutual Fund. However, ELSS funds being mutual fund scheme will invest as per the scheme related documents and have market related risk associated with them. For investors looking for low risk funds and those who can afford to have a lock-in period of 15 years, PPF may be more suitable. Whereas, for individuals looking for potentially high returns over the long term, ELSS fund may be more suitable. The return of PF is fixed whereas the return of ELSS is market linked and may vary depending upon the economic scenarios.
What are the advantages and disadvantages of ELSS funds?
ELSS funds are eligible for income tax deduction under Section 80C. Moreover, ELSS funds have a potential for higher returns. ELSS funds are an affordable investment choice with investment starting with as low as ₹500. However, they are subject to market risks and susceptible market volatility. Moreover, they are high risk funds and hence not suitable for an investor looking to avoid risk. Lastly, the fund has a lock-in period of three years and the investor cannot redeem/withdraw before the lock-in period is over.