Birla Sunlife Tax Plan is managed by Mr. Ajay Garg. The fund seeks long-term capital appreciation along with income tax relief for investment. The scheme invests at least 89.77% of its net assets in equities and related instruments. New investors can safely skip this fund. If you have already invested keep a close watch at its performance.
Birla Sunlife Tax Plan is a mid cap fund which means it would invest your money in stocks of medium and small cap companies. Mid Cap and small cap companies tend to give kicker returns while large cap companies tend to be stable. It has 57.35% allocation to large cap companies, 31.98% allocation to mid cap companies and around 10.66% allocation to small cap companies.
- Saving on tax outgo
- Creating wealth
- Lifestyle needs
- Child's education
- Child's marriage
- Planning for retirement
- Home Purchase
If you had invested Rs 1 lakh when the fund was launched in Feb 1999, your value of investments would be around to Rs 1.48 lakhs. If you had invested Rs. 1 Lakh for 5 years, your value of investments would be around Rs. 1.15 lakhs. The performance has been similar to other funds in this category.
Assume you had invested Rs 10,000 every month in Birla Sunlife Tax Plan through SIP for 5 years today you would have around Rs 7.69 lakhs.
Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follow their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.
Mutual fund schemes that have exposure to mid-sized companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.
There is a lock-in period of 3 years on this fund, which means that you cannot sell this fund within 3 years of your purchase date. Withdraw when your goals are closer to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.
Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a quarter. Look out for news and developments that can affect the sector as a whole.
A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.
No exit load applies for units withdrawn from this scheme. Expense ratio of Birla Sunlife Tax Plan is 2.91%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.
The returns in a mutual fund are absolutely tax free, provided you did not withdraw within 1 year.
Birla Sunlife Tax Plan qualifies for sec 80C ELSS benefits, which means you can invest up to Rs 1 lakh a year in this fund and deduct the amount from your gross total income for computing income tax.