Franklin India Taxshield Fund is an equity-linked savings scheme that offers tax benefits under Section 80C of the Income Tax Act, 1961. The scheme comes with a three-year statutory lock-in period and is a good investment option for those who want capital growth in the long term.
Investment Objective of Franklin India Taxshield Fund
Franklin India Taxshield Fund aims at providing investors with capital growth in the medium to long term in addition to offering tax benefits under Section 80C of the Income Tax Act, 1961.
Key Features of Franklin India Taxshield Fund
Here are some of the key features of Franklin India Taxshield Fund:
|Type of Fund||Open-ended equity linked savings scheme with a three-year statutory lock-in period|
|Plans Available||Growth plan, Dividend Plan, Direct – Growth Plan, and Direct – Dividend Plan|
|Options Under Each Plan||The Dividend Plan comes with Payout Options, and the Direct – Dividend Plan also comes with Payout Options|
|Systematic Investment Plan||Available|
|Systematic Transfer Plan||Available|
|Systematic Withdrawal Plan||Available|
Investment Amount for Franklin India Taxshield Fund
|Minimum Application Amount (for Growth option)||Rs.500 (plus in multiples of Rs.500 thereafter)|
|Minimum Additional Investment (for Growth option)||Rs.500 (plus in multiples of Rs.500 thereafter)|
|Minimum Instalment for Systematic Investment Plans||Rs.500 (plus in multiples of Rs.500 thereafter)|
|Minimum Instalment for Systematic Withdrawal Plan||-|
Asset Allocation for Franklin India Taxshield Fund
|Instruments||Allocations (Percentage of total assets)||Risk Profile|
|Equity and equity-related securities||Up to 100%||High to medium|
|Money market securities||Up to 20%||Low|
|PSU Bonds and debentures||Up to 20%||Medium to low|
Who can Invest in Franklin India Taxshield Fund?
- Individuals who are above 18 years of age and residents of India
- Guardians or parents for investment on behalf of minors
- Corporate bodies, Public Sector Undertakings, and companies that have been registered within the country
- Hindu Undivided Families (HUFs)
- Partnership firms through a partner, sole proprietorships through proprietors, and Limited Liability Partnerships (LLPs)
- Non-resident Indians (NRIs) and Overseas Citizens of India (OCIs)
- Charitable and Religious Trusts with the authorisation to invest in mutual funds’ units
- Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) if they have the permission of the Securities and Exchange Board of India
- Navy, Air Force, Army, and other paramilitary units
- Societies, co-operative societies, endowments or wakf boards, Body of Individuals (BOIs), Association of Persons (AOPs), clubs and trusts with the authorisation to invest in mutual funds’ units
- Other bodies, institutions or individuals who have the authorisation to invest in mutual funds’ units
- Industrial and scientific research organisations
- Any other corporate bodies, institutions or individuals as decided by the Asset Management Company
- Alternative Investment Funds (AIFs) or mutual fund schemes provided they are in keeping with the regulations established by the Securities and Exchange Board of India
NAV Disclosure and Benchmark for Franklin India Taxshield Fund
The Net Asset Value of the Franklin India Taxshield Fund is to be calculated on a daily basis and must be published on the website of the fund house as well as the website of the Association of Mutual Funds in India. As per the regulations of the Securities and Exchange Board of India, the fund is expected to disclose its semi-annual and annual results too.
The following formula is used for the calculation of the Net Asset Value of a scheme:
(Fair or market value of the investments made by the scheme + Current assets of the fund – current liabilities) / Number of outstanding shares
Benchmark Index of Franklin India Taxshield Fund: Nifty 500 Index
Franklin India Taxshield Fund Fund Manager
Franklin India Taxshield Fund is managed by Lakshmikanth Reddy and R. Janakiraman. Both managers have been with Franklin India for over two years and possess a wealth of experience in the mutual fund industry.
Investment Restrictions of Franklin India Taxshield Fund
The following are the investment restriction of Franklin India Taxshield Fund:
- The scheme is restricted from making investments over 10% of its Net Asset Value in equity and equity-related securities of any particular company.
- The scheme is restricted from making investments over 5% of its Net Asset Value in unlisted equity or equity-related securities.
- The fund house, through its schemes, is not allowed to own over 10% of the voting rights of any company.
- The scheme is restricted from making investments over 10% of its Net Asset Value in debt securities that consist of money market securities issued by a single issuer that are rated not under investment grade by a credit rating agency.
- The scheme is not allowed to make investments in any fund of funds scheme.
- The scheme is restricted from advancing loans for any reason.
Dividend Policy of Franklin India Taxshield Fund
The Trustee can declare dividends at any time and at the frequency as it deems fit. The frequencies at which dividend can be declared by the Trustees are annually, semi-annually, quarterly, monthly, weekly, or daily. The distribution of dividend will depend on the availability and sufficiency of distributable surplus. The distribution of dividends shall take place within 30 days from the date on which they were declared.
Other Facilities Offered by Franklin India Taxshield Fund
The following are some of the key facilities offered by Franklin India Taxshield Fund:
- Switch/Exchange: Investors are allowed to switch or exchange units from one scheme of the fund house to another, or units from one plan to another of the same scheme at the applicable NAV if neither of the schemes or plans have any book closure, or if the units that are being exchanged does not have a lock-in period, or if the amount that is being exchanged is equal to or more than the minimum investment amount needed to open an account in the destination plan or scheme.
- Step Up SIP: This facility allows investors who have invested through Systematic Investment Plans to raise the amount of the instalment by a fixed sum at pre-determined intervals of time.
- Pause SIP: This facility allows investors who have an ongoing SIP to pause the instalment payment at any time. Investors can avail this facility if their SIP payment frequency is monthly or quarterly, and the pause is allowed for only one instalment.
Why you should invest in Franklin India Taxshield Fund
Franklin India Taxshield Fund can be a profitable investment option as it provides capital appreciation in the long term, but one of the main reasons why you should consider investing in this scheme is that you can claim tax benefits on your investment under Section 80C of the Income Tax Act, 1961.
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