Assets under management of equity- linked savings schemes (ELSS), which offer tax benefits to investors, have zoomed to their highest level since April, 2011 at over Rs 25,000 crore.
As per the latest data available with mutual fund industry body AMFI, the total AUM of ELSS, or tax-saving funds, stood at Rs 25,069 crore at the end of January 2013. This is the first time since April, 2011 that assets in ELSS category has crossed the Rs 25,000 crore mark.
From a meagre Rs 1,410 crore at the end of January 2003, the AUM of ELSS has soared by nearly 18 times in 10 years, according to Association of Mutual Funds of India (AMFI) data.
The ELSS funds generally see significant inflows between December and March, as investors look to invest in schemes offering tax benefits as part of their fiscal-end tax planning activities.
Investments up to Rs 1 lakh in ELSS funds by eligible investors qualify for tax deduction under Section 80C of Income Tax Act. An investment of Rs 1 lakh in ELSS funds can help an investor save up to Rs 30,900 from his/her total tax liability.