Know How You Can Save Tax with UTI Long Term Equity Fund

Planning taxes is an integral part of any financial planning, and ELSS Mutual Funds play a pivotal role in providing the same. Section 80C of the Income Tax Act provides the benefit of availing deduction of an amount of up to Rs.1.5 lakh on the total taxable income through which one can reduce the tax liability upto Rs.46,350. There are various mutual fund schemes that provide the tax saving benefit, and UTI Long Term Equity Fund holds a remarkable position among its peers. This is because of the returns offered by them in order to gain substantial growth for the investors’ money.

Before evaluating the performance and portfolio of UTI Equity Tax Saving Plan, it is important to understand the significance of ELSS schemes. An ELSS, i.e., equity Linked Savings Scheme is a diversified equity mutual fund having a majority of the corpus invested in equities. Being an equity fund, the returns from the schemes falling in this category reflect returns from the equity markets.It has a lock-in period of three years after which one is free to withdraw the monies whenever required. Moreover, as the dividends earned from the equity investments in Indian companies are exempt, the returns fetched in ELSS are also free from taxability. Along with, the long-term capital gain that is earned on selling the ELSS scheme after three or more years is further not taxable in the hands of the investors. This way, one gains the advantage of availing tax benefit thrice.

UTI Equity Tax Saving Plan also provide such provides to the investors. Being an equity plan, it also offers high capital appreciation as well. The performance and portfolio concentration of the scheme depict that it is highly beneficial considering the same for tax saving and long-term financial goals. Here are the details about the same -

UTI Long Term Equity Fund (D) - Performance

The scheme is ranked third in the ELSS category by CRISIL for the quarter which ended in June 2017. The NAV of the scheme amounts to Rs.20.530 as on August 10, 2017, which depicts it per unit price in the market as on that date. The absolute annual returns of the scheme have reached up to 40.8% in the past. It has been beating its benchmark returns on an annualised basis for a long time, with the three- and five-year annualised returns of 12.80 and 15.80 percent. The scheme is a consistent performer in its category and holds a significant position among its peers.

Portfolio Analysis

The scheme has approximately 93% of the total assets invested in the equity stocks and shares of various companies. It also has a considerable investment in the cash and money market instruments to provide diversification and regular income. The average market capitalisation of the scheme is Rs.60,697.32 crore which is grater than its category’s average. The sectors in which most of the funds have been invested in this scheme include financial, energy, construction, technology, engineering, and FMCG. The top holdings of the scheme include - Reliance Industries, HDFC Bank, ICICI Bank, ITC, Infosys, Larsen & Toubro, State Bank of India, and Mphasis. These all are among the most reputed companies in India and have high valuations in order to generate high-yielding returns.

So now, it must be clear that UTI Long Term Equity Fund has a high potential to make everyone earn the most out of their investment. As per the peer comparison, the scheme has been considered the most preferred one in the industry. You must buy this plan for your portfolio for capital growth & tax savings.

Dishika is well-versed with the ups and downs of the financial market and has published articles on mutual fund and SIP. She is associated with MySIPonline.com, which is an AMFI registered mutual fund company.