Axis Mutual Fund manages assets worth 318704 crores and was set up on 2009-09-04. Its current offering of mutual fund schemes includes 305 debt, 80 equity, 110 hybrid, 141 other, 20 solution oriented funds. The company is led by its CEO Gop Kumar Bhaskaran.
Axis Long Term Equity Fund (Growth) or ELSS is an equity-oriented mutual fund that invests in equity securities listed on the stock exchange. Hence, Tax Saver Mutual Funds are suitable for investors looking for long-term wealth creation and tax saving purposes. This fund provides tax benefits up to Rs 1.5 lakhs under Section 80C of the Income Tax Act, 1961. However, ELSS funds come with a lock-in period of 3 years. Also, tax saving should not be the only reason to invest in Axis tax saving mutual fund schemes. Moreover, the Axis tax saving fund is not suitable for investors looking for regular income and liquidity in the form of a zero lock-in period.
Things To Consider Before Investing in Axis Tax Saver Mutual Fund
Investment Objective: Axis Tax Saver Mutual Fund is an open-ended equity scheme with an investment objective of delivering long-term wealth creation and tax saving. The scheme is eligible for tax benefits under Section 80C of the Income Tax Act, 1961. However, investors must identify their investment goal and link it with the fund objective to create wealth during the period.
Investment Strategy: Axis Tax Saver Mutual Fund invests in a diversified portfolio of companies with growth potential and sustainable business models with a long-term perspective. The fund managers of Axis Tax Saver Schemes will evaluate the fundamentals of the businesses while selecting the stocks of companies. Also, it employs sufficient measures to minimise and control the risks involved in building a portfolio. Therefore, linking investors’ long term strategy with the fund strategy is essential.
Associated Risks: Axis mutual fund’s Tax Saving schemes have certain risks associated with them. The investment value may fluctuate depending on the numerous circumstances and forces affecting the capital and money markets. Also, there is a very high risk for the principal amount. Axis Tax Saver Fund has the potential to deliver higher returns against the associated risks involved. Therefore, investors must evaluate the associated risks before investing in this scheme.
Tax on Axis Tax Saver Mutual Funds
The tax treatment of Axis Tax Saver Mutual Fund is similar to that of an equity mutual fund. The returns earned on the Axis Tax Saver fund are taxable at the time of redemption. The capital gains taxation depends on the period of holding. On the sale of units of Axis Tax Saver Mutual Fund before 12 months, a short-term capital gain arises. However, STCG does not apply due to the lock-in period. A long-term capital gain will occur on redemption after 12 months from the date of allocation of these units. As per the law, LTCG of up to Rs 1 lakh is tax exempt. Any LTCG on the Axis Tax Saving Mutual Fund scheme is taxable at 10% above the exemption limit.
