The Hindu Business Line : Reliance Mutual Fund's ELSS comes with accident cover

While the key features of the new offering are similar to that of the existing ELSS from other funds, what distinguishes RMF's ELSS is that the scheme offers Personal Accident Death Insurance with a maximum cover of Rs 5 lakh.

There has been an upturn in investment in the ELSS during the past few months after the latest Budget made investment in equity related tax savings scheme eligible for deduction from taxable income up to Rs 1 lakh. The earlier cap on ELSS for IT purposes was Rs 10,000. Now, investment in ELSS is clubbed with other investments such as PF, PPF, and NSC under Section 80 C with an overall ceiling of Rs 1 lakh.

This has provided an opportunity for investors to have a look at stock market related investment options and ELSS has emerged as one of the favourites. For the mutual fund industry, it provides the fund managers to take a long-term view of the market instead of worrying about redemption pressures in view of the fact that there is a three year lock-in period for the investments due to the IT benefit.

The cover would be linked to the investment value of the individual (amount invested in the investor's account). It would not be linked to the capital appreciation of the investment made in the scheme, RMF has said.

The fund has said that for investment amount less than or equal to Rs 10,000, the level of cover available would be Rs 50,000.

For investment amount between Rs 10,001 and Rs 25,000, the insurance cover would be Rs 2 lakh and for investment between Rs 25,001 and Rs 50,000, the level of cover would be Rs 3,00,000. RMF has capped the level of cover at Rs 5 lakh for investment amount greater than Rs 50,001.

The scheme opens for subscription on July 25.

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