An Equity Linked Savings Scheme is an equity oriented mutual fund that invests at least 80% in stocks in accordance with the Equity Linked Saving Scheme 2005, notified by Ministry of Finance. An ELSS can either be actively managed or passively managed.

The Aditya Birla Sun Life Tax Saver Fund is an actively managed ELSS. It has a lock-in period of 3 years . Investments in this fund are eligible for a deduction of up to INR 1,50,000 from taxable income, under section 80C of the Income tax Act. Its lock-in period is amongst the lowest from other tax saving investments options under section 80C.

The primary benefits are availing of tax deduction and potential for long term capital growth, being an equity-oriented fund.

The fund manager of this scheme has the flexibility to invest across market caps and across sectors, in line with the fund discipline.

Investors looking for a tax saving investment option which also has the potential for higher long term capital returns.

The mandatory lock-in period is 3 years, however being an equity-oriented scheme , investors can be invested for a long-term period extending beyond the 3-year lock-in period.

The fund offers a direct plan and a regular plan.

Direct Plan is only for investors who purchase /subscribe Units in a Scheme
directly with the Mutual Fund and is not available for investors who route
their investments through a Distributor. The expense ratio of a direct plan fund is lower.
A regular plan is one in which investors’ investment in the fund are routed through a broker or distributor. The expense ratio of a regular plan fund is higher.

Each plan will also have following options:

Growth Option – Under this, returns of the fund are reinvested in the fund itself. These will reflect in the increase in NAV of the fund.

Income Distribution cum Capital Withdrawal (“IDCW”) Option (Pay-out of IDCW/ Reinvestment of IDCW/ IDCW Sweep Facility) ^
Under this, returns of the fund are distributed to investors as IDCW Investors can opt for IDCW pay out or IDCW reinvestment wherein they purchase more units of the fund with the income distributed.

^the amounts can be distributed out of investors capital (Equalization Reserve), which is part of sale price that represents realized gains. Note: IDCW is declared subject to the availability of distributable surplus as computed in accordance with SEBI Regulations. It must be distinctly understood that actual declaration of IDCW and frequency thereof is at the discretion of trustees. There is no assurance or guarantee to Unitholders as to the rate of IDCW distribution nor that the IDCW will be paid regularly.

The fund does not have any exit load.
The fund applies an expense ratio. This is intended to cover fund management and other administrative costs of the fund.

No, having a demat account is not necessary for investing in this fund.