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%.
When you want to invest for five years or more, you can comfortably beat the inflation rate and are better off than fixed-income options. But the way your interest fluctuates, be ready to invest. Apart from this, you get tax exemption on the amount invested under Section 80C as per Indian Income Tax laws. According to this clause, up to Rs, 1.5 lakh is invested in eligible securities in a financial year, such as this fund is exempt from tax.
But the way your interest fluctuates, be ready to invest. Also, keep in mind that you cannot withdraw money from this fund until the completion of three years from the beginning of the investment. You will have to invest in this scheme through SIP, like all equity funds.
Taxation of Income: Capital gains
- If an investor sold his mutual fund units after one year from the date of the start of the investment, if you earn up to Rs 1 lakh in your financial year, then this amount will be exempt from tax. If you get more than Rs 1 lakh, then this amount will be taxed at a rate of 10%.
- If you are selling your mutual fund unit within one year from the beginning of the date of investment, then any amount you get will be taxed at the rate of 15%.
- As long as you continue to operate the units, there will be no tax.
Keep in mind: If you need to redeem your investment in less than five years, do not invest in this or any other ELSS fund.