The Hindu Business Line : Tax-saving schemes - Now time for pay-out season

The tax savers, which have provided an average 55 per cent in the last one year (as on February 23), have started declaring record dates, some of these being in the second and third week of the closing month of the current fiscal.

Some of the payouts announced in recent days will range from a modest 40 per cent from Canequity Taxsaver to a hefty 150 per cent from SBI MF's Magnum Taxgain. Thrown in the middle are names like ING Vysya Tax Savings Fund, which too have declared record dates.

Tax-saving schemes, says Mr N.K. Garg, CIO of Sahara MF, have logged decent gains in recent times, a fact that is enabling some of them to pay out handsome dividends. "These are diversified products that have managed to do well in a bullish market. Here, the fund manager can leverage the three year-lock in to his advantage," he noted. the last few weeks too saw dividend announcements from the ELSS ranks, fund distributors point out. Franklin Templeton's Taxshield, for instance, paid 35 per cent in mid-February. There were a few others.

Mr Ravi Sharma, who heads marketing at Birla MF, mentioned that tax savers often have a loyal set of investors with whom the fund houses concerned want to share their gains with. "The fact that redemption pressures are not high in the case of an ELSS is a plus for us," he said.

The ELSS category recently gained in stature, thanks to changes in tax norms (read: introduction of Section 80C of the I-T Act). More fund houses have come out with tax savers of their own; these included ABN Amro, Fidelity and Deutsche. There are, at the moment, about 25 open-end ELSS products. Certain fund houses - Franklin Templeton, HDFC and Principal - manage two ELSS each.

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