Shriram ELSS Tax Saver Fund for Better Growth Invest Now

The Shriram ELSS tax saver fund falls under this category and provides an opportunity to the investors, to undertake equity oriented funds, along with taking into account tax-saving requirements as per the applicable tax provisions.

This is even more crucial if you take out the Shriram ELSS tax saver fund regular growth option.

What Is the Shriram ELSS Tax Saver Fund?

The Shriram ELSS tax saver fund is a part of Equity Linked Savings Scheme (ELSS).

Understanding ELSS Mutual Funds

ELSS funds are equity funds with a 3-year lock-in period.

How the Fund Fits Into Tax-Saving Investments

Traditionally ELSS has been linked with investments under Section 80C of the Income-tax Act, under the tax provisions.

But the tax treatment is determined by the tax regime and investor’s situation. So, it is best to take note of current income-tax rules before investing with a specific goal in mind of saving on taxes.

The main thing to remember is that don’t pick an ELSS fund because of the word “tax saver. Take the characteristics of the investment into account, too.

Key Features of the Shriram ELSS Tax Saver Fund

An understanding of the basics of the Shriram ELSS tax saver fund helps in investing prior to investing.

The following are some of the important points:

• It comes under ELSS category.
• It mainly offers equity-market coverage.
• Has a 3 year lock in investment period.
• It might be taken into account for tax savings depending on applicable rules.
• Regular Plan: An intermediary or distributor is involved.
• Growth option allows accumulation of gains in the scheme and not distributing them periodically in the form of IDCW.
• The returns are not fixed, and are based on the market.

Equity-Oriented Investment Approach

Equity is a basis of an investment strategy in ELSS. The fund manager’s investment approach is to invest the scheme’s assets in shares and equity-related securities in accordance with the investment approach.

How is this relevant to you?

There is a risk of a significant, albeit short-term volatility in equity, as it can offer meaningful long-term growth opportunities. A year can be very successful and then a year may be very unsuccessful.

It’s just a part of investing in the equity market.

Tax-Saving Benefit Under Section 80C

Investment in ELSS under section 80C might be eligible for deduction as per the tax regime and conditions applicable.

Eligible ELSS investments can be part of an investor’s overall Section 80C planning, if they are investing in the old tax regime. Investors should keep the overall Section 80C tax-benefit limit in mind and check their other eligible investments and payments before assuming that their entire ELSS investment will qualify for a tax benefit.

Keep in mind that tax regulations also can alter, and it is essential to always check the latest tax provisions prior to making an investment.

Three-Year Lock-In Period

The lock-in feature is one of the unique features of ELSS.

Let’s assume that you had invested in an ELSS fund from today. Typically, you can’t cash that out prior to the end of the applicable three-year period.

This might be a limitation that will result in discipline for investing. It’s not such an easy task to react quickly to all the market trends and exit investments.

However do keep in mind that the lock-in will also lower liquidity. Therefore, don’t invest in ELSS, which you might require for an emergency or need for a significant payment.

Regular Plan Growth Option

The Shriram ELSS tax saver fund regular growth option is a combination of two concepts – Regular Plan and Growth option.

What Does the Growth Option Mean?

The Growth option provides you with no periodic investment gain distribution to the investors; rather it is IDCW, which does investment gain distribution to investors only when the portfolio generates investment gains.

Shriram ELSS Tax Saver Fund and Long-Term Financial Planning

The mutual fund should be a part of the financial plan, and not the financial plan itself.

Before investing in Shriram ELSS tax saver fund, find out your goals.

Do you have a retirement investment objective? Children’s education? Wealth creation? Tax planning? Some of these?

Why Investment Horizon Matters

This can be the case with equity investing, too.

It’s important to consider a fund’s performance over a longer period of time. Market cycles, economic conditions, and portfolio changes may affect the fund’s performance over different periods.

Therefore, it’s important that investors check performance over a range of time and put it into proper perspective with a suitable benchmark and category context.

Combining ELSS With Other Investments

Based on your objectives, you can mix and match asset classes like equity funds with other assets like debt investments, fixed-income securities, cash reserves and other appropriate assets.

It would depend on your risk appetite, short-term or long-term investment plans and your liquidity needs and financial goals.

How to Invest in the Shriram ELSS Tax Saver Fund

There are several fundamental steps to come to invest in a mutual fund.

Complete Your KYC

To invest in mutual funds, there are certain KYC requirements to be completed.

Have necessary identity and financial papers handy and be sure that the information you enter is correct.

Select the Appropriate Investment Option

Investors need to make sure that the plan and option they are considering is right for them.

When looking for Shriram ELSS tax saver fund regular growth option, ensure that you have chosen the “regular plan” and “growth option” before purchasing.

Review the Fund Details Before Investing

Avoid the rush to invest because you want to do your tax planning as fast as possible.

Review:

• Scheme objective
• Risk level
• Expense ratio
• Portfolio
• Lock-in period
• Minimum investment requirements
• Applicable tax treatment
• Exit-related provisions
• Recent performance information

Conclusion

The Shriram ELSS tax saver fund is a combination of equity oriented investment, lock in period of three years and tax saving benefit as per the tax provisions.

 Investors looking to invest in the equity market and prefer Regular Plan structure with Growth option may consider the Shriram ELSS tax saver fund regular growth Option.

FAQs

1. What is the Shriram ELSS Tax Saver Fund?

Ans) The Shriram ELSS tax saver fund is an Equity Linked Savings Scheme (ELSS) which offers equity oriented market exposure and the tax-saving benefits associated with ELSS as per the current tax laws. It is a type of equity investment, and is subject to market risk.

2. What is the lock-in period of the Shriram ELSS Tax Saver Fund?

Ans) ELSS investments will typically have a three-year ‘lock in’ term. An investor can’t sell his/her ELSS investment before the lock-in period in the investment plan.

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

Ans) Regular Plan with Growth option is Shriram ELSS tax saver fund regular growth. In the Regular Plan, investors typically receive gains through an intermediary, while the Growth Plan keeps gains invested instead of paying them out as periodic IDCW distributions.

4. Can the Shriram ELSS Tax Saver Fund provide guaranteed returns?

Ans) No. An ELSS fund is market linked, and doesn’t guarantee returns. It is possible to experience a change in the NAV depending on the performance of securities in its portfolio and the market conditions.

5. Should I invest in an ELSS fund only for tax saving?

Ans) Saving on taxes is not all that they need to take into account. It is also important to consider your investment timeline, tolerance for the volatility of the equity market, your need for liquidity, the need to diversify your portfolio, the tax implications and the costs of the fund before you invest.