Kotak Tax Saver Scheme(D)

Performance

Kotak Mahindra Mutual Fund is owned by Kotak Mahindra Bank Ltd. (KMBL) which was the first Non-Banking Financial Company (NBFC) in India to be converted into a bank. Before it received a banking licence from the Reserve Bank of India (RBI), KMBL was known as Kotak Mahindra Finance Ltd. The fund manager of Kotak Mahindra Mutual Fund is Kotak Mahindra Asset Management Company Ltd. (KMAMC) and the fund house offers various schemes in asset categories of debt, equity, liquid, etc.

The Kotak Tax Saver Scheme - Dividend is an open-ended equity linked savings scheme (ELSS) launched on 23 November 2005 and comes with a 3-year lock-in period. The scheme invests in equity and its related securities and lets the investor enjoy tax benefits. The dividend option of the scheme offers regular income to the investor.

Investment Objective

To generate capital gains for the investor over a long term through investment in a portfolio that predominantly consists of equity and its related securities while also offering tax rebate under Section 80C of the Income Tax Act, 1961.

Key Features of the Scheme

The Kotak Tax Saver scheme is ideal for investors who wish to achieve capital appreciation over a long term and also wish to enjoy tax benefits. The scheme exhibits the below features:

Investment amount for Kotak Tax Saver Scheme

Asset Allocation for Kotak Tax Saver Scheme

Who can invest in Kotak Tax Saver Scheme?

The following entities/persons can apply for subscription to the units of Kotak Tax Saver scheme:

• Individuals residing in India aged above 18 years, either singly or jointly (cannot exceed 3)
• Hindu Undivided Families
• Corporate bodies and firms registered in India
• Parents or legal guardians on the minor’s behalf
• Co-operative and registered societies permitted to invest
• Partners of Partnership Firms
• Statutory/Public corporations and Public Sector Undertakings (PSUs)
• Charitable and religious trusts, and trustees of private trusts
• Body of Individuals or Association of Persons
• Navy/Army/Air Force, paramilitary units and other eligible institutions
• Scientific and Industrial Research Organisations
• Investment Institutions and Financial Institutions
• Government of India approved International Multilateral Agencies
• SEBI registered mutual funds
• Regional rural banks, co-operative banks, and other banks
• Foreign Institutional Investors or SEBI registered sub-accounts of FIIs
• Foreign Portfolio Investors (FPIs)
• Persons of Indian Origin/Non-Resident Indians on repatriation or non-repatriation basis
• Pension/Provident/Gratuity and such other funds as and when allowed to invest
• Universities and Educational Institutions
• Public Financial Institutions as defined under the Companies Act 2013
• Educational institutions and universities
• Other schemes of Kotak Mahindra Mutual Fund

NAV Disclosure and Benchmark for Kotak Tax Saver scheme

The NAV of the Kotak Tax Saver scheme is obtained by dividing the scheme’s net assets by the number of outstanding units on the date of valuation. The NAV will be calculated up to 3 decimal places and disclosed at the end of every business day. The NAV will be updated on the website of AMFI (www.amfiindia.com) and website of Kotak Mahindra Mutual Fund (assetmanagement.kotak.com) by 9:00 p.m. every business day.

The NAV will also be sent to at least 2 newspapers for publication on every business day. The newspapers publishing the NAV will have a nationwide circulation. The scheme’s monthly portfolio will also be available on the official website of Kotak Mahindra Mutual Fund on or before the 10th day of succeeding month.

Liquidity: Redemption of the units of the Kotak Tax Saver scheme can be done after the 3-year lock-in period. Units can be purchased and redeemed at applicable NAVs.

Benchmark: Nifty 500

Fund Manager

Mr. Harsha Upadhyaya

The Kotak Tax Saver scheme is managed by Mr. Harsha Upadhyaya and he has been managing the fund since 25 August 2015. Mr. Upadhyaya has an overall experience of 23 years spread across equity research and fund management. Prior to working with Kotak Mahindra Mutual Fund, he had worked with DSP BlackRock Mutual Fund and UTI Mutual Fund. Besides the Kotak Tax Saver scheme, he also manages the schemes - Kotak Equity Opportunities Fund, Kotak Standard Multicap Fund, and Kotak India Growth Fund (Series 4 and Series 5).

Investment Restrictions on the Kotak Tax Saver Scheme

The Securities and Exchange Board of India (SEBI) has laid down the below-given investment restrictions to subscribe to the units of Kotak Tax Saver scheme:

• The scheme cannot advance loans for any purpose or borrow except to meet the scheme’s temporary liquidity needs. The borrowing, however, cannot exceed 6 months and should not be above 20% of the scheme’s net assets.
• The scheme is not permitted to invest above 10% of its NAV in debt instruments that are unrated and issued by a single issuer. The total investment in such securities also cannot be more than 25% of the scheme’s net assets. Any such investments will need to be approved by the Board and Trustee of the AMC.
• The scheme is not allowed to invest above 10% of its NAV in debt securities issued by a single issuer and rated above the investment grade by a credit rating agency. This limit can be extended to 12% of the NAV provided that the Trust and Board of the AMC approve it.
• The scheme can invest the pending deployment of a scheme’s funds in short-term deposits of scheduled commercial banks without being charged any advisory or investment management fees.
• The scheme is not permitted to invest in any Fund of Funds (FoFs) schemes.
• Debentures of any residual maturity period will attract the same restrictions as debt securities including the ones issued by public institutions/bodies such as municipal corporations, electricity boards, state transport corporations, etc. The restrictions, however, will not apply to securities issued by the central or state governments.
• The scheme shall not make any investments in any security issued through private placement, unlisted securities, and listed securities of group companies of the sponsors above 25% of the net assets.
• The mutual fund can enter into transactions dealing with government securities only in the dematerialised form.

Dividend Policy of Kotak Tax Saver scheme

The scheme will declare dividends only if the distributable surplus is available and adequate. The frequency of the dividend will be at the discretion of the Trustee. The dividend warrants if issued will be dispatched to the unitholders within 30 days from dividend declaration date.

Other facilities offered under Kotak Tax Saver scheme

The below facilities are offered by the Kotak Tax Saver scheme for the benefit of investors:

• Systematic Investment Plan (SIP)
• Systematic Withdrawal Plan (SWP)
• Switching
• Systematic Transfer Plan (STP)
• Trigger Facility
• Dividend Transfer Plan (DTP)
• Daily frequency under STP facility

Why you should invest in Kotak Tax Saver Scheme

• Can invest small - With an investment of just Rs.500 a month, investors have an opportunity to create wealth over a long term. Therefore, investors need not worry about having a huge sum to invest in mutual funds.
• Professional management - The fund manager of the scheme, Mr. Harsha Upadhyaya has around 23 years of experience in managing mutual fund investments. Hence, you can rest assured that your investments will be handled efficiently to achieve the most favourable returns.
• Tax benefits - Being an equity-linked savings scheme, the Kotak Tax Saver scheme offers tax benefits under Section 80C of the Income Tax Act, 1961. This means that the returns you receive from this scheme are tax-free. An amount of up to Rs.1.5 lakh can be deducted from your taxable income thereby reducing your tax liability.
• Lock-in period - Since the Kotak Tax Saver scheme has a lock-in period of 3 years, it compels you to stay invested for a longer period. Since the performance of mutual funds is directly proportional to the duration of the investment period, you will be able to enjoy better returns on your investment.

Extra benefits - The Kotak Tax Saver scheme comes with additional benefits like Systematic Withdrawal Plan, Trigger facility, Dividend Transfer Plan (DTP), Switching facility, etc. All these added benefits make the scheme even more attractive.

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