When we have money in our hands, we feel powerful yet peaceful in our minds. But what if we could achieve that peace by investing and saving on taxes? The DSP ELSS Tax Saver Fund offers investors the opportunity to save and grow their money.
This statement suggests that having money can provide a sense of empowerment and peace. However, the idea proposed is that instead of merely holding onto cash, one can find peace of mind through investing, particularly in tax-saving investment options like the DSP Tax Fund. This fund not only enables individuals to grow their wealth but also offers tax-saving benefits under Section 80C of the Income Tax Act.
Investing in the DSP ELSS Tax Fund provides the dual advantage of wealth accumulation and tax savings. By allocating funds to this scheme, investors can potentially achieve long-term financial goals while reducing their tax liabilities. This approach not only fosters financial growth but also brings a sense of security and peace of mind.
How Good is the DSP ELSS Fund?
The DSP ELSS Fund, launched on January 18, 2007, has steadily gained prominence among investors. With its current asset under management standing at Rs.14,147 crore, it reflects substantial trust and interest from investors.
One of its key attractions is its track record of delivering superior returns and maintaining consistent performance over time. This reliability and performance consistency have positioned the DSP ELSS Fund as a preferred choice for investors seeking growth opportunities while also enjoying tax benefits.
The key features of the DSP Tax Saver Fund?
Here are some key features of the DSP Tax Saver Fund:
Tax Benefits
The fund offers tax benefits under Section 80C of the Income Tax Act, allowing investors to claim deductions on their taxable income by investing in the fund.
Lock-in Period
It comes with a mandatory lock-in period of three years, encouraging a disciplined approach to long-term investing.
Diversified Portfolio
The fund invests in a diversified portfolio of equity and equity-related securities across various sectors and market capitalizations.
Professional Management
Managed by experienced fund managers who employ robust research-driven strategies to optimize returns while managing risks effectively.
Flexibility
Investors have the flexibility to choose between growth and dividend options based on their investment preferences.
Potential for Capital Appreciation
With a focus on investing in quality stocks with growth potential, the fund aims to generate capital appreciation over the long term.
Regular SIP Option
Investors can opt for a systematic investment to invest regularly and benefit from rupee-cost averaging, mitigating the impact of market volatility.
What are the types of Investments?
Growth
In a growth investment, investors aim to generate capital appreciation over the long term. They typically invest in assets such as stocks or mutual funds with the expectation that the value of their investment will increase over time.
Dividend
In a dividend investment, investors receive regular payouts from the company or mutual fund in the form of dividends. These dividends are a portion of the company’s profits distributed to shareholders. Investors often opt for dividend investments to generate a steady income stream.
Dividend Reinvestment
In dividend reinvestment, instead of receiving dividends in cash, investors choose to reinvest the dividend back into the same investment. This allows investors to purchase additional, shares or units of the asset, thereby increasing their investment and potentially accelerating the growth of their portfolio over time.
In conclusion, understanding the types of investment options available can help investors tailor their portfolios to meet their financial goals and preferences.
5 Common Mistakes to Avoid in ELSS Tax Saver Fund?
Here are five common mistakes to avoid in the DSP ELSS Tax Saver Fund:
1.Lack of Research
Failing to research the fund’s objectives, performance history, and investment strategy before investing can lead to suboptimal investment decisions.
2.Ignoring the Lock-in Period
Not considering the mandatory lock-in period of three years can result in liquidity constraints and limit flexibility in managing investments.
3.Timing the Market
Attempting to time the market by investing based on short-term market fluctuations rather than focusing on long-term investment goals can lead to poor decision-making.
4.Overlooking Tax Implications
Neglecting to consider the tax implications, including capital gains tax on redemption and dividend distribution tax, can erode potential returns from the investment.
5.Neglecting Diversification
Failing to diversify the investment portfolio beyond the DSP ELSS Plan can expose investors to unnecessary risk and limit potential returns.
Let’s see Who’s Behind this Successful Strategy
Charanjit Singh
Mr. Singh has a bachelor’s degree in electronics and communication engineering and an MBA in finance and systems. Before joining DSP ELSS Tax Saver Fund Mutual Fund, he worked in Capital Goods, Power, and Infrastructure at B&K Securities India and Capital Goods and Infrastructure at Axis Capital Limited. He has also worked with BNP Paribas India Securities, Thomas Weisel Partners, HSBC, IDC Corp., and Frost & Sullivan.
Rohit Singhania
Rohit Singhania serves as the Fund Manager for the DSP India T.I.G.E.R. Fund (The Infrastructure Growth and Economic Reforms Fund), the DSP Opportunities Fund, and the DSP Tax Saver Fund. Additionally, he co-manages the DSP Natural Resources and New Energy Fund. Rohit joined DSP Investment Managers in September 2005 as a Portfolio Analyst in the firm’s Portfolio Management Services (PMS) division, catering to discretionary accounts and providing advisory services to institutional clients. Later, in June 2009, he transitioned to the Institutional Equities Team at DSP Investment Managers, where he focused on research analysis in sectors including Auto, Auto Ancillaries, Metals, Infrastructure, Sugar, and Hotels. Before his tenure at DSP, Rohit worked at HDFC Securities Limited as a Senior Equity Analyst for 13 months, contributing to its Institutional Equities Research Desk.
Conclusion
Investing in the DSP ELSS Fund presents a compelling opportunity to grow wealth while enjoying tax benefits under Section 80C of the Income Tax Act. With its proven track record of delivering superior returns and maintaining consistent performance, coupled with its key features such as tax benefits, diversified portfolio, and professional management, the DSP ELSS Fund stands out as a preferred choice for investors seeking long-term growth. However, it’s crucial to avoid common mistakes such as lack of research, ignoring the lock-in period, and neglecting diversification. By understanding the types of investments available and considering a Systematic Investment Plan, investors can make informed decisions and effectively grow their wealth over.
