Principal Tax Savings Fund

A few key features of Principal Tax Savings Fund are as follows:

Investment Amount for Principal Tax Savings Fund

*Note: Investors are currently not required to maintain a minimum balance in their folios. The trustees/AMC, however, may change this stipulation at any point in the future by giving advance notice to the investors.

Asset Allocation for Principal Tax Savings Fund

Who can Invest in Principal Tax Savings Fund

The following entities are eligible to invest in Principal Tax Savings Fund:

• Indian residents who are:
  • Adult individuals investing as the sole holder
  • Adult individuals on a joint basis (not exceeding three members)/adult individuals investing on a survivor basis
  • Parents or guardians on behalf of minors
  • Partnership firms
  • Hindu Undivided Families (HUFs) through the Karta
  • Companies, institutions, public sector undertakings, and bodies corporate
  • Banks, investment and financial institutions, funds, and societies
  • Private trusts, religious and charitable trusts, drafts or endowments, and trustees of private trusts
  • Industrial research and scientific organisations
  • Body/association of individuals, whether they are incorporated or not
  • Navy, air force, army, and other paramilitary bodies
  • Mutual funds that are registered with Securities and Exchange Board of India (SEBI)
• Bodies corporate that are incorporated outside the country and multilateral funding agencies, provided they have the approval of the Reserve Bank of India/Government of India
• International financial organisations that have been approved for making investments in India
• NRIs, Persons of Indian Origin (PIOs) residing outside India, and Foreign Institutional Investors on a non-repatriation or repatriation basis
• Any other institutions, corporate bodies, or individuals as decided by the mutual fund house
• Any other scheme of Principal Mutual Fund
• The trust/trustees, sponsor, AMC, associate companies, subsidiaries, or its affiliates
• Superannuation/gratuity/provident/pension fund and other such employee benefit and retirement funds

*Note: The above-mentioned list is indicative. Prospective investors are advised to consult with their financial advisors to check if this scheme is suitable to them.

NAV Disclosure and Benchmark for Principal Tax Savings Fund

The net asset value or NAV of a scheme is calculated by dividing the total assets of the scheme by the total number of outstanding units, as on the valuation date. The NAV will be computed by the asset management company every business day. It will then be published in a minimum of 2 daily newspapers that are circulated across the country. Further, the asset management company will also update the NAV on its official website (www.principalindia.com) and on the official website of the Association of Mutual Funds in India/AMFI (www.amfiindia.com) by 9:00 p.m. or any other time that is prescribed by the AMFI/SEBI.

Investors or unitholders can subscribe to and also get their respective units repurchased after the expiry of the due lock-in period at NAV-related prices on all business days. Units issued under this particular scheme have a lock-in period of 3 years. The Benchmark Index of this scheme is Benchmark S&P BSE 200 Index.

Principal Tax Savings Fund Manager

The fund manager of Principal Tax Savings Fund is Mr. P.V.K. Mohan, who has served in this capacity since September 2010.

Investment Restrictions of Principal Tax Savings Fund

A few investment restrictions that are specific to Principal Tax Savings Fund are as follows:

1. The scheme shall not invest over 5% of its total assets in unlisted equity-related instruments or equity shares.
2. The fund under all of its schemes should not own over 10% of any firm's paid-up capital carrying voting rights.
3. The scheme will not invest in any funds scheme or fund.
4. The scheme shall not invest over 10% of its net asset value in equity-related instruments or equity shares of any organisation.
5. The total value of all "Illiquid Securities" of the scheme cannot exceed over 15% of the scheme's total assets.

*Note: A full list of the investment restrictions for Principal Tax Savings Fund can be found in the Scheme Information Document.

Dividend Policy of Principal Tax Savings Fund

The asset management company or trustees may provide returns to unitholders on a periodic basis by declaring dividends under the scheme. Dividends will be distributed subject to receiving approval from the trustees and on the basis of adequacy and availability of distributable surplus. The quantum of the dividend and its record date will be fixed by the AMC/trustees. Only unitholders whose names are recorded in the register of unitholders will receive dividends.

Dividend warrants and the account statement will be credited/dispatched to unitholders within a period of 30 days or as per the stipulated period. Under the Regular Plan and the Direct Plan options of Principal Tax Savings Fund, the record date for the half-yearly dividend option is June 17 and December 17.

Other Facilities under Principal Tax Savings Fund

Some of the many special facilities that are offered to investors are as follows:

1. Switching Option: Investors are given the option to switch between the direct plan and the regular plan and its options at NAV-based prices. Investors can also switch from a select open-ended scheme that is managed under the fund into any scheme existing as on the date of the switch or during the new fund offer (NFO) period of a new scheme at NAV-based prices.

1. Systematic Investment Plan (SIP): SIP option is available for regular and planned investments. Under the Systematic Investment Plan, unitholders can invest specific amounts of money on a periodic basis for a continuous period. Opting for an SIP allows unitholders to save a certain amount of money on a monthly or quarterly basis by purchasing units of the scheme.

1. Systematic Investment Plan (SIP) Top-Up Facility: The SIP Top-Up Facility allows investors to gradually increase their investment amount at a pre-defined frequency during the SIP tenure.

1. SMS-Based Transactions: Unitholders are given the option to transact in Principal Mutual Fund's schemes via SMS. To avail this facility, unitholders will need to submit an SMS transaction registration form with the NACH registration form to Principal Mutual Fund.

*Note: A full list of special facilities that are offered to unitholders can be found in the Scheme Information Document.

Why you should Invest in Principal Tax Savings Fund

Principal Tax Savings Fund is an open-ended equity-linked savings scheme. This scheme is ideal for any individual who is looking for capital growth in the long term by investing in equity funds and equity-related securities and derivatives. Further, the scheme also offers tax benefits up to a maximum of Rs.1,50,00 lakh under Section 80C of the Income Tax Act, 1961. Thus, any individual who is looking for a financial product that provides market-linked returns and tax benefits can opt for this scheme.

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