HDFC TaxSaver(D)

Performance

HDFC Mutual Fund, managed by HDFC Asset Management Company Ltd, is among the leading mutual fund companies in India with Rs.6,990.52 crore of assets under management (AUM) till July 2018. HDFC MF was founded on 8 June 2000 as a trust and later on 30 June 2000 it had been registered with SEBI as a mutual fund company. At present, this prominent fund house has its presence in almost every city across the country. Headquartered in Mumbai, this company offers a wide range of schemes under equity funds, debt funds, liquid funds, Exchange Traded Funds (ETFs), Fund of Funds (FoFs) and others.

The HDFC TaxSaver-Dividend Plan is one of the various equity-linked savings schemes (ELSS) offered by the company. This scheme coming with a statutory lock-in period of 3 years primarily aims to make investments in equity and equity-linked securities having high return prospects. Apart from generating regular income and capital growth for the investors, this scheme also offers tax-saving benefits. The dividend plan of this mutual fund scheme will allow the investors to get regular payouts which will help them to have a constant source of income throughout the investment period. Under this plan, the dividend amount instead of being reinvested for capital growth in future will be paid to the investor in his/her bank account at regular intervals based on the availability of distributable surplus.

Investment Objective of HDFC TaxSaver Plan

The prime motto of this scheme is to offer long-term capital appreciation to the investors along with generating regular income through smart investments made in a well-managed portfolio comprising equity and equity-linked instruments at a moderately high associated risk.

Key Features of HDFC TaxSaver Plan

Investment Amount for HDFC TaxSaver Plan

Asset Allocation for HDFC TaxSaver Plan

Who can invest in HDFC TaxSaver Plan?

The following are the persons/entities who are eligible to make investments in the units of HDFC TaxSaver Plan:

• Adult individuals who are domiciles of India
• Karta of a Hindu Undivided Family (HUF)
• Parent/legal guardian of minors on their behalf
• Non-Resident Indians (NRIs)/Persons of Indian Origin (PIO) either on repatriation or non-repatriation basis
• Educational organisations/institutions and Universities
• Religious organisations, Charitable Trusts, Wakfs or endowments of private trusts
• Foreign Portfolio Investors who are registered with the SEBI
• Limited Liability Partnerships (LLPs) and Partnership firms in India
• Associations of Persons or Body of Individuals
• Companies and Corporates which are registered in India
• Military including Navy, Army, Air Force, and other paramilitary forces
• Proprietorship which is on the name of an individual proprietor
• Financial institutions and banks including Regional Rural Banks and Co-operative Banks
• Scientific and Industrial Research Organisations
• International Multilateral Agencies having approval under the RBI and Government of India
• Mutual fund schemes having registration with the Securities and Exchange Board of India (SEBI)
• Pensions/Gratuity/Provident Funds can also invest up to a permissible extent
• AMC/Trustee or Sponsor or their associates

NAV Disclosure and Benchmark for HDFC TaxSaver Plan

NAV: For calculating the Net Asset Value (NAV) of the HDFC TaxSaver Plan units, its net assets are divided by the number of units under the scheme which are outstanding on the date when the NAV is calculated. The final figure resulting after the calculation is the final NAV of the scheme. The NAV for this scheme is calculated and revealed at the end of every business day. The calculation of the NAVs are computed up to 3 decimals. The final value is mentioned on the official website of the fund house at www.hdfcfund.com and on the AMFI website at www.amfiindia.com on every business day by 9.00 p.m. in the evening. The NAVs are also published in at least 2 widely-subscribed newspapers having nationwide circulation.

Liquidity: The HDFC TaxSaver plan being an open-ended scheme, its units can be purchased and sold on the National Stock Exchange of India on every business day at the prevalent NAV prices. The units can also be redeemed by the investors on every working day like any other stock.

Benchmark Index: The benchmark index of the HDFC TaxSaver Mutual Fund plan is Nifty 500 Index. This means the scheme’s performance is compared to the performance of its benchmark index to assess its gains and losses in comparison to its benchmark.

Fund Manager for HDFC TaxSaver Plan

This fund is efficiently managed by Mr. Vinay R Kulkarni having a total experience of 29 years in equity research and Mr. Rakesh Vyas with a rich experience of 11 years in the same domain. While Mr. Vinay R Kulkarni is managing the scheme for 11 years and 5 months, Mr. Rakesh Vyas is managing it for 5 years and 11 months.

Investment Restrictions on HDFC TaxSaver Plan

Investments made in the HDFC TaxSaver Plan is subject to certain limitations and restrictions as imposed by the Securities and Exchange Board of India (SEBI) which are as follows:

• Buying and selling of securities should be done by the scheme on the basis of deliveries. For every purchase and sale of the units, the scheme has to deliver the securities.
• For dealing with transactions that are related to government securities, only dematerialised mode of transaction is allowed.
• The HDFC TaxSaver mutual fund cannot own more than 10% of any firm’s paid-up capital which is having voting rights.
• The scheme can invest a maximum of 10% of its NAV in debt instruments which are issued by a single issuer and are rated above the investment grade by a credit rating agency. This limit, however, is not applicable to treasury bills, government securities, collateralised borrowing (CBLO), and lending obligations.
• The scheme is not allowed to make investments in unlisted securities of a group company or associate of the sponsor, any security issued by private offering, and any listed securities of sponsor’s group company that are higher than 25% of the net assets.
• The maximum limit of investing in the unlisted equity and equity-linked securities is 5% of its NAV.
• The scheme is not allowed to pledge funds in short-term deposit in banks which have made investments in this particular scheme.
• The HDFC TaxSaver scheme can not invest more than 15% of its net assets in short-term deposits of all the scheduled commercial banks. However, the limit of investment can be increased to 20% on approval of the trustees.

Note - The above-mentioned investment restrictions on the scheme will be applicable only at the time of making an investment.

Dividend Policy of HDFC TaxSaver Plan

The Trustee of the scheme will decide the dividend payments based on the availability of surplus assets computed according to the SEBI regulations. The frequency of dividend payment and the amount of dividend will also be decided by the Trustee. Unitholders who have chosen the dividend investment option while subscribing to the scheme and whose names will appear on the register of the unitholders upheld by the company or beneficial ownership statement held by the Depositories on the record date are the ones to receive the dividends. After deducting the applicable taxes at source the final dividend amount will be paid to the unitholder. Usually, the dividend is paid within 30 days from the date of its declaration. However, the plan doesn’t guarantee the amount of the dividend and the frequency at which it will be distributed among the unitholders. After the distribution of the dividend, the NAV of the scheme will get reduced by the declared dividend amount and the paid dividend distribution tax/statutory levy.

Distribution of dividend: The dividend payments will either be made through a cheque or will be directly credited to the registered bank account of the unitholder under his/her investment folio as per the payment mode opted by the investor. Unless the investor has chosen to receive the dividend payout through transaction instruments like cheque, warrant, or, demand draft, the amount will be transferred to the bank account of the unit holder through any of the following electronic modes of payment:

• National Electronic Funds Transfer (NEFT)
• National Electronic Clearing Service (NECS)
• Real Time Gross Settlement (RTGS)
• Electronic Clearing System (ECS)

Other Facilities offered by the HDFC TaxSaver Plan

Apart from the above-mentioned features, this mutual fund offers several added facilities as well. Here are the other facilities that are offered by the HDFC TaxSaver Plan to the investors who subscribe to it:

• Systematic Withdrawal Plan (SWP)
• Systematic Withdrawal Advantage Plan (SWAP)
• Systematic Investment Plan (SIP)
• Systematic Transfer Plan (STP)
• HDFC Swing Systematic Transfer Plan
• One Time Mandate (OTM) Facility
• Dividend Transfer Plan Facility
• Facility to buy or sell units through the stock exchange
• HDFC Flexindex Plan
• Switching Option

Why should you invest in HDFC TaxSaver Plan?

Considered to be one of the largest mutual fund companies in India based on its asset value, since its establishment, HDFC Mutual Fund has been witnessing a rapid growth. At present, it is among the fastest growing fund houses in the country. Being a well-performing equity scheme of this well-established fund house, there are multiple reasons to invest in this scheme, some of which are detailed below:

• Well-managed scheme: The HDFC TaxSaver Plan is not only a professionally-managed fund scheme but also both the fund managers of this scheme have rich experience of more than 10 years of managing funds. Hence, you can be assured that your hard-earned money will remain secure and give out high returns.
• Multiple investment options: While investing in this plan you will get both growth and dividend investment options. You can choose any of the options to invest in the scheme as per your investment objective. If you want to generate regular income by means of your investment, you can go for the dividend option and if you want to build wealth over a long period of time, you can select the growth option.
• Tax saving benefits: This scheme offers tax benefits to the investors under Section 80C of the Indian Income Tax Act, 1961. It has a statutory lock-in period of 3 years so that the amount remains invested for a minimum duration of 3 years resulting in capital growth. Investors who want to get regular income along with capital growth while also getting tax benefits can subscribe to the units of this fund.

Customised facilities: Along with this scheme the investors will get several facilities such as the HDFC Flexindex Plan, HDFC Swing Systematic Transfer plan, and others. The HDFC Swing Systematic Transfer Plan is a scheme through which the investors who own units in non-demat form can transfer a certain amount from a particular open-ended scheme to the growth option of another scheme of HDFC Mutual Fund at regular intervals.

GST rate of 18% applicable for all financial services effective July 1, 2017.