Birla Mutual Fund has introduced Birla Taxplan 98, a close-ended tax saving scheme as per the equity-linked savings Scheme (ELSS) guidelines under the Income Tax Act.
Under section 88 of the Income Tax Act, investors can save 20 per cent on tax up to an investment of Rs 10,000 in this scheme.
Additionally, investors are also eligible for benefits under Section 54 EA and EB whereby 100 per cent of capital gains tax can be saved.
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Investors putting in their money before March 15, 1998, will be paid compensation in the range of 1.25 per cent to 3.50 per cent of the subscription amount, depending on the month of subscription.
Those who put in their money in December will be entitled for 3.5 per cent of the incentives, while those who subscribe in March will get 1.25 per cent of the subscription amount.
The plan, which opened for investment today comprises an issue price of Rs 10 per unit at par. Redemption begins three years after allotment at net asset value (NAV).
In addition, the scheme will be listed on OTCEI and other stock exchanges after April 1, 2001. The scheme closes on March 31, 1998.
This is the first time that we have launched a close-ended scheme and are confident of its success, S K Mitra, director, Birla Capital International AMC told Busiess Standard. This is a good time to enter the capital market for a mutual fund because many good scrips are available for a bargain price, some at the lowest-ever prices, he said.
Moreover, India has emerged as the best market among the emerging economies, and therefore foreign funds will continue to flood into this market, he added. While no target amount has been fixed, the company hopes to garner at least Rs 25 crore.
The other two projects of the company - India Advantage Fund and Birla Advantage Fund - have outperformed the market, said Mitra.