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An Equity-Linked Saving Scheme (ELSS) is a great investment option that offers twin benefits of tax saving and capital gains.

It enables you to enjoy tax benefits of up to Rs. 46,350* under Section 80C of the Income Tax Act. Apart from that, ELSS has certain distinct advantages:

• Compared with all the tax planning schemes available today, ELSS has the shortest lock-in period (3 years) under Section 80C.
• As with an equity fund, ELSS funds invest a large part of the fund in equity. With the Indian economy possessing strong fundamentals and corporate earnings showing strong growth potential, equities as an asset class look set to provide attractive returns.
• Thanks to the 3 year lock-in period, ELSS allows the fund manager to build a portfolio for the long-term without worrying about everyday redemptions. Equity investments have proven to offer the best returns among various asset classes over a long term horizon.
• The profits on sale of ELSS units are treated as long-term capital gains and as per current tax laws, these are not subject to tax up to Rs. 1 lakh. Profits above Rs. 1 lakh are taxed at 10% plus applicable cess.

*The tax rate applied is 30.9%.

Buying when the market is low and selling when the market is at its peak is easier said than done. A simple and powerful option of investing in this fluctuating market scenario is Systematic Investment Plan (SIP).

SIP is a method of investing a fixed sum, regularly in a mutual fund that allows purchase of units in a particular scheme on a given date every month / quarter. It provides benefit of investment without taking a call on when is the ‘right’ time.

Advantages of investing in Mutual Funds through SIP:

• Convenience: Enables you to invest a pre-set amount of money in the scheme of your choice automatically. You can issue post-dated cheques or give standing instructions to Deutsche Bank and your investments will happen on the specified date in the specified scheme every month.
• Less risky: It enables you to capitalise on periodic dips in the stock market and get more units at lower purchase price, thus reducing your average unit cost resulting in higher returns.
• Good savings discipline: It instills a good savings discipline as you are committed to invest a fixed sum regularly. Thus, you start investing before you spend.
• Easy on your pocket: You can decide how much to invest and how often depending on your capability.
• Compounding returns: The longer the period of your investment, the more wealth you accumulate, because of the power of compounding. The amounts invested early and regularly therefore helps in creating a substantial amount of wealth as returns over the years.

Start an SIP today with a small amount every month.

Fixed Income Funds attempt to generate a steady income while preserving investors’ capital. They invest exclusively in fixed-income securities like Bonds, Debentures, Government of India securities and Select Money Market Instruments. Fixed Income funds generate returns through Interest Income, Marked to Market Capital Gains / Loss.

Benefits of Fixed Income Funds:

• Low Risk of Capital Erosion
• Steady Rate of Return
• Tax efficient investment through mutual funds
• Potential for capital appreciation
• Liquidity better than Fixed Deposits
• No Lock in period
• Open ended