The purpose of the scheme is medium to long-term capital growth, with tax exemption on salaries. The program invests in equity and is the risk to PSU bonds and debentures as well as money market instruments. The scheme aims to provide income tax exemption to investors as well as the increase of capital. This scheme rated as a moderately high risk. An investor can invest through the SIP route, and minimum lump sum amount is Rs 500
It is a tax saver mutual fund scheme from Franklin Templeton Mutual Fund. We mostly invest in this scheme due to its tax saving feature. The Franklin Templeton tax shield direct growth scheme is currently managed by Lakshmikant Reddy and R Janakiraman and launched in India on 1 January 2013. Its AUM is around Rs 4,123.88 crore, and the latest level of NAV is around Rs. 613.152 as of 31 January 2020.
Here you can see Franklin Templeton tax shield direct growth scheme Return Performance
• 7.97% in the last year.
• 29.29% in the previous three years.
• 152.71% since the commencement of the scheme.
• You can start an SIP investment with a minimum of Rs 500.
Tax Implications
- A deduction of 1.5 lack will be tax-free under 80C
- Three years lock.
- Returns will be taxed at 10%.
You will comfortably beat the inflation rate if you want to save for five years or longer and you are better off than fixed-income options. But be ready to invest, as your value fluctuates. Besides that, you will receive tax exemption on the amount invested under Section 80C as per Indian Income Tax law. Under this clause, In the financial year up to Rs 1,5 lakh is invested during qualifying shares, such as this fund is exempt from taxation.
However, bear in mind that you cannot withdraw money from this fund until three years have elapsed from the start of the investment. As with all equity funds, you will need to participate in this scheme by SIP.
Taxation of Income: Capital gains
- If an investor sells his mutual fund units after one year from the investment start date, when you receive up to Rs 1 lakh in your financial year, then that amount is exempt from tax. When you earn more than Rs 1 lakh, you will be taxed at a rate of 10%.
- When you sell your mutual fund unit within one year of the investment date, the money you collect will be taxed at a rate of 15%.
- As long as you continue to operate the units, there will be no tax.
Keep in mind: If your investment has to be redempted in less than five years, do not invest in this or any other ELSS scheme.
