Parag Parikh Tax Saver Fund

PPFAS Mutual Fund’s Parag Parikh Tax Saver Fund Direct-Growth is a Tax Saver mutual fund. It is an open-ended equity-linked savings plan with a mandatory 3-year lock-in period and tax benefits. This plan was introduced on 04/07/2019 and is handled by Raj Mehta, Rajeev Thakkar, Raunak Onkar, and Rukun Tarachandani.

The fund invests 81.66% of its assets in domestic equities, with 63.67% in large-cap stocks, 3.75% in mid-cap stocks, and 10.8% in small-cap stocks.

The objective of the Scheme is to achieve long-term capital appreciation by constructing a diversified portfolio of equities and equity-related products. (80% of the total assets are in compliance with the Equity Linked Saving Scheme, 2005, announced by the Ministry of Finance).

Pros & Cons

How to invest in Parag Parikh Tax Saver Fund?

5paisa streamlines the Parag Parikh Tax Saver Fund investment, and documentation is no longer necessary. Simply follow the steps given below:

Step 1: Log in to your 5Paisa Account. In case you do not have one, register and create a new 5Paisa account in 3 easy steps. Alternatively, you can also download the 5Paisa app on your smartphone for Android or IOS and log in from your device.
Step 2: Search for the PPFAS Mutual Fund scheme that you wish to invest in
Step 3: Select the suitable option as per your specific requirement and risk appetite
Step 4: Select the investment type from SIP (Systematic Investment Plan) or Lumpsum investment
Step 5: Put the amount that you’d like to invest and proceed with the payment option by clicking on the ‘Invest Now button

This completes the investment process on the 5Paisa platform. Once your payment is successfully debited, you can see the PPFAS Mutual Fund reflected in your 5Paisa account In approximately 3-4 working days. If you selected the SIP option, the amount chosen would get deducted every month starting from the initial payment date.

What is the expense ratio of the Parag Parikh Tax Saver Fund?

The expense ratio is a measure of the yearly cost of the mutual fund’s management services. The Expense Ratio, which is calculated as a percentage of the fund’s AUM, reduces the return of each unit. Choose a fund with a low-cost ratio if you want to retain a bigger portion of your returns.

Who should invest in the Parag Parikh Tax Saver Fund?

● The Parag Parikh Tax Saver Fund is suitable for investors who are looking to save on taxes: This fund provides tax benefits under Section 80C of the Income Tax Act, making it an attractive option for investors who are looking to reduce their tax liability.
● Those investors who want to keep their money in the market for at least 3 years and who, in addition to greater return expectations, want to minimise their income tax liability can invest in Parag Parikh Tax Saver Fund. Also, these investors must be willing to commit to a 3 holding period and the prospect of modest losses on their investments.
● It’s important to note that this fund may not be suitable for all investors, and investors should consider their risk tolerance, and investment goals, and consult a financial advisor before making an investment decision.

What are the benefits of investing in the Parag Parikh Tax Saver Fund?

Some benefits of investing in the Parag Parikh Tax Saver Fund fund include:

● Tax benefits

Investments in the Parag Parikh Tax Saver Fund are eligible for tax deductions up to ₹1.5 lakhs per financial year under Section 80C of the Income Tax Act. This, however, is not the cap. Gains will be taxed at a flat rate of 10%. *As per Income Tax Rules prevailing for the Financial Year 2022-23.

● Diversification

By investing in a mix of stocks, the fund provides diversification and reduces the risk of investing in a single stock.

● Long-term growth potential

Equity investments have the potential to provide higher returns over the long term, compared to fixed-income investments.

● Professional management

The fund is managed by experienced investment professionals who make investment decisions based on in-depth research and analysis.