Bandhan ELSS Tax Saver Fund for Growth

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The Bandhan ELSS tax saver fund is a mutual fund tax saver fund of Bandhan Mutual Fund which is equity oriented.

If the investors are specifically seeking to invest in the Bandhan ELSS tax saver fund regular plan growth, then the details of the plan are important.

What Is Bandhan ELSS Tax Saver Fund?

The Bandhan ELSS tax saver fund is a mutual fund that falls under the equity linked saving scheme (ELSS), which is aimed at people looking to invest in the equity market and gain tax benefits under the tax provisions.

How Does Bandhan ELSS Tax Saver Fund Work?

An ELSS would pool money from investors and invest in a diversified portfolio of equity and equity related securities based on its investment philosophy.

You invest in a professionally managed mutual fund, rather than picking individual stocks. The fund manager follows the investment mandate of the scheme.

This may make investing easier for people who want a stake in the market without the hassle of researching and tracking individual stocks daily.

Equity-Oriented Investment Approach

The biggest benefit of an ELSS is that it offers equity exposure. Increased revenues, profits and cash flows over time can create long-term equity potential to build wealth.

Meanwhile, equity markets may undergo correction, crash and prolonged volatility. So investors should not expect an ELSS to be a product that guarantees returns in addition to giving them tax benefits.

This fund is not just a tax saving deposit; it is also an equity investment with a tax-saving benefit.

Understanding the Three-Year Lock-In

One of the unique features of ELSS is the three-year lock-in period.

Generally, units are not eligible for redemption before the end of the three year lock-in period. If you are planning to use it in near future for emergency money, then do not invest in an ELSS fund.

The lock-in may even promote financial discipline. You don’t need to keep reacting to the market; you need to stick with it for a certain amount of time.

Key Features of Bandhan ELSS Tax Saver Fund

This fund offers many features that may be beneficial to those with long-term investment horizons.

The following are some of the important characteristics:

• Equity-oriented investment strategy
• Three-year lock-in period
• The potential for tax savings due to the application of the relevant provisions
• Structures regular and direct plan
• Growth option
• Those who can invest in either SIP or lump-sum, as per the scheme terms and conditions
• Professional fund management
• All equity investments can be diversified

Tax-Saving Potential

Traditionally, taxpayers have favored ELSS because Section 80C allows deductions within the overall limits of the applicable tax regime.

As per the current list by the Income Tax Department, the total limit for the deduction under Section 80C of the old tax regime is ₹1.5 lakh for eligible investments.

One important factor to keep in mind is that the tax break is not permanent. This is the sum of all the eligible investments under section 80C and not a ₹1.5 lakh deduction per ELSS investment.

Also, tax saving benefit depends on the tax regime you are under. So, before you only invest to get a tax deduction, make sure to review your tax situation.

Long-Term Wealth Creation

It’s not all about tax saving with ELSS.

As an equity investor, ELSS can benefit an investor in the long run. Equity has traditionally provided investors with a long-term wealth-building tool, but no past performance is an indicator of future performance.

The important thing to keep in mind is that, even though the minimum lock-in period is three years, the fund is not necessarily a three-year investment. The lock-in time is three years, but not necessarily the best investment time frame.

For long-term wealth creation, it may be better to not redeem immediately after the lock-in period has ended, but to leave the investment longer.

SIP and Lump-Sum Investment Options

The investor can either make a one-time investment or periodic investment via Systematic Investment Plan depending on the investment options available.

A lump-sum investment involves investing a higher amount in one go. A SIP is a plan that involves making investments in a series of installments.

How SIP Can Help Investors

Assume that you make a fixed monthly investment. When the NAV is low you buy more units, when the NAV is high, you buy fewer. This can help to average out the amount you pay for a stock over time, but SIP is not a way to make sure you make money or avoid losses when the stock market dips.

SIP can also make investing more attainable.

You can make your investment plans over the year rather than waiting till the end of the financial year and making hasty investments.

That’s what often can distinguish a financial plan from a last-minute financial scramble.

Bandhan ELSS Tax Saver Fund Regular Plan Growth

For those who invest through a distributor/ intermediary and wish to invest in the Bandhan ELSS tax saver fund regular plan growth option may be applicable.

The individual components of the words “Regular Plan” and “Growth” help clarify what is happening in the structure.

What Is a Regular Plan?

In the general case, a Regular Plan is offered via mutual fund distributors.

What Does the Growth Option Mean?

Generally, the Growth option does not offer periodic payments from the scheme as is done with a payout option.

Things to Check Before Investing

Take some time to understand what the latest news and updates on the scheme are before you invest in the Bandhan ELSS tax saver fund.

Check the funds:

1. Investment objective
2. Portfolio
3. Benchmark
4. Fund manager
5. Expense ratio
6. Historical performance
7. Risk level
8. Asset allocation
9. Lock-in conditions
10. Tax implications
11. Regular versus Direct Plan structure
12. Growth option
13. You own investment experience

Conclusion

The investors who wish to get the benefit of both equity market exposure and long-term wealth creation along with the tax saving benefits as per the applicable rules can consider the Bandhan ELSS tax saver fund.

The Bandhan ELSS tax saver fund regular plan growth is the best option for investors who are specifically looking at the growth of the fund regularly to invest in the tax saver program.

FAQs

1. What is Bandhan ELSS Tax Saver Fund?

Ans) Bandhan ELSS tax saver fund is an equity mutual fund offered to offer equity exposure while enjoying tax benefits that are applicable.

2. What is the lock-in period for Bandhan ELSS Tax Saver Fund?

Ans)The ELSS investment has a mandatory lock-in period of three years and every SIP has a lock-in period of three years.

3. What does Bandhan ELSS Tax Saver Fund Regular Plan Growth mean?

Ans)The Bandhan ELSS tax saver fund regular plan growth is the Regular Plan and Growth option which is normally offered through an intermediary.

4. Can I claim a tax deduction by investing in Bandhan ELSS Tax Saver Fund?

Ans)The tax regime applied and the overall limit (Section 80C) may apply to eligible ELSS investments.

5. Is Bandhan ELSS Tax Saver Fund suitable for short-term investors?

Ans)ELSS is usually not suitable for short term investments as the lock in period is three years and it is risky in equity market.