photo: <<Aiii>> Re: BIRLA TAX saver

Note that after this dividend NAV will come back down to Rs. 90
(reduced by Rs. 50). Net net you don't make anything more - just save
tax on more money than you invest.

Meaning if you put in one lakh and you are in the 30% bracket, but you
will get about Rs. 35K back as dividend, so you have invested Rs. 65K
only; and with the NAV reduction your fund value is also down to Rs.
65K. usually you save 30% on investing in ELSS this time you save 50%
in tax (saving 30K on investment of 65K). But one major pain is that
dividends can take upto one month to come and two that this fund has
not performed well over the last four months (when this "scheme" was
declared) and remember your money (65K) is locked in for three years.

I personally don't recommend it because I don't like their unethical
practices - they told distributors to spread word about this dividend
from Dec 2006, even though SEBI says its illegal to pre-announce
dividend more than five days in advance. Their assets increased from
60cr in December to more than 350 cr. today - and they get management
fees of approx 1% of that.

Your call though, but I just wanted to tell you another part of the
story.

Thanks
Deepak

On Mar 13, 1:39 am, "maddy bloody" <maddy.blo...@gmail.com> wrote:
> LAST chance to save ur taxes.Well u have money and want to save taxes.But u
> are not in a position to lock for three years.Let me tell u the easy way out
> to get some part relief and the market is just conducive to put ur money for
> three year horizon.
> BIRLA TAX SAVER FUND 1996 has come out with 500% dividend the last of this
> year with record date 16th march 2007.What it means is its current NAV is
> something around Rs.136-140.If u buy on or before 16th march 2007 u will get
> back Rs.50/unit as dividend.U may ask whats there in getting my money back
> as dividend.
> ILLUSTRATION>>>
> You have to save 60,000 as per sec 80(C) (assuming u have already saved
> Rs.40000 through PF,insurance and other tax saving instruments).Your
> employer has already cut ur feburvary salary as taxes and what u have to do
> is just buy this Birla Tax saver fund and u put Rs.60000 in this fund u get
> approximately 418.92 units with 140 as NAV and 2.25% entry load and on 16th
> of march what u will get is Rs.20946 into ur bank account.
> What does this mean?Now u have saved as per section 80(c)
> Rs.60000(u can put all the 1 lk also if u need but remember sec 80(c) has a
> cap of 1 lk and beyond that no tax benift but returns are tax free though)
> If u come under the 30% income slab which is above 2 lakh 50000 u save
> something like Rs.18360 as direct taxes and u invest 39,054 in a performing
> ELSS which has reasonable track record over a three year horizon and u get
> back Rs.20946 in total u save Rs.39306 out of the Rs,60000.
> If u come under the 20% income tax slab that is 1.5lk to 2.5lk if u save say
> Rs.1lk(just for illustration no logic) u get nearly 700 units with NAV
> considred at Rs.140/unit u will get a tax rebate of Rs.20000+the dividend
> amount Rs35000(Rs50*700 units).
> I will clarify if u have further doubts.
> Remember the record date is march 16th people who have not saved taxes don't
> trust NSC,PPF or KVP as they are worthless and INDIA is a great long term
> story and the lockin period is just 3 years compared to 6 years in other
> schemes.The best way to save taxes is to use ELSS funds and some have given
> 500% returns in the past 5 years time and consistent 20% returns on a yearly
> basis.
> CHEERS,
> maddy
>
> DISCLOSURE&DISCLAIMER:
> I am no way related to BIRLA TAX SAVER FUND and i am not holding this fund
> either and i don't have any vested intrest in this whatsoever.This mail is
> for the people who don't understand the importance of section 80(c) and
> indiduals have to take their decisions and its their hard earned money and
> one has to take their personal decision and i am not forcing anyone.