DSP ELSS Tax Saver Fund is an open-ended Equity Linked Savings Scheme (ELSS) offered by DSP Mutual Fund, designed to provide investors with long-term capital appreciation while offering tax benefits under Section 80C of the Income Tax Act, 1961.
Key Features:
- Investment Objective: The scheme seeks to generate medium to long-term capital appreciation from a diversified portfolio substantially constituted of equity and equity-related securities of corporates, enabling investors to avail deductions from total income as permitted under the Income Tax Act.
- Lock-in Period: Investments are subject to a mandatory lock-in period of three years, which is among the shortest durations compared to other tax-saving instruments.
- Fund Manager: Rohit Singhania has been managing the fund since July 2015, bringing extensive experience in equity research and investments.
- Minimum Investment: The minimum lump sum investment required is ₹500, with additional investments also starting from ₹500. For Systematic Investment Plans (SIP), the minimum installment is ₹500.
- Expense Ratio: As of March 3, 2025, the expense ratio for the regular plan is 1.65%.
- Assets Under Management (AUM): The fund's AUM stands at ₹14,981.09 crore as of February 28, 2025.
Performance:
As of March 20, 2025, the fund's Net Asset Value (NAV) for the Growth option is ₹128.92. The trailing returns over different time periods are:
- 1 Year: 11.62%
- 3 Years: 17.21%
- 5 Years: 23.2%
In comparison, the category returns for the same durations are 4.66% (1 year), 14.12% (3 years), and 20.16% (5 years).
Portfolio Composition:
The fund maintains a diversified portfolio with the following allocations:
- Equities: Approximately 96.23%
- Cash & Cash Equivalents: About 3.77%
The top 10 equity holdings constitute around 39.37% of the assets, with the top three sectors making up approximately 45.88% of the assets.
Tax Implications:
- Tax Benefits: Investments qualify for deductions under Section 80C, up to ₹1.5 lakh per financial year.
- Capital Gains Tax: Long-term capital gains exceeding ₹1 lakh are taxed at 10% without the benefit of indexation.
- Dividend Distribution Tax: Dividend income is added to the investor's income and taxed according to the applicable tax slab. Additionally, if dividend income exceeds ₹5,000 in a financial year, a TDS of 10% is deducted by the fund house.
Risk Level:
The fund is categorized under the 'Very High' risk category, indicating that it is suitable for investors with a high-risk appetite seeking long-term capital appreciation.
How to Invest:
Investors can invest in the DSP ELSS Tax Saver Fund through the DSP Mutual Fund website or other mutual fund distribution platforms. The process typically involves selecting the fund, choosing the investment amount, and completing the necessary KYC formalities.
Conclusion:
DSP ELSS Tax Saver Fund offers investors an opportunity to participate in equity markets while availing tax benefits. However, considering its high-risk category and equity exposure, it is best suited for investors with a long-term investment horizon and a high-risk tolerance.
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