Final Project ..

A Study of Tax Saving Scheme in Mutual Fund
1. INTRODUCTION OF PROJECT:
Mutual funds are institutions that collect money from several sources - individuals or
institutions by issuing 'units', invest them on their behalf with predetermined investment
objectives and manage the same all for a fee. They invest the money across a range of
financial instruments falling into two broad categories equity and debt. Individual people
and institutions no doubt, can and do invest in equity and debt instruments by themselves but
this requires time and skill on both of which there are constraints. Mutual funds emerged as
professional financial intermediaries bridging the time and skill constraint. They have a team
of skilled people who identify the right stocks and debt instruments and construct portfolios
that promises to deliver the best possible 'constrained' returns at the minimum possible cost.
In effect, it involves outsourcing the management of money. More explicitly, the benefits of
investing in equities and debt instruments are supposedly much better if done through mutual
funds. This is because of the following reasons: Firstly, fund managers are more skilled. They
are trained to identify the best investment options and to assess the portfolio on a continual
basis; secondly, they are able to invest in a diversified portfolio consisting of 15-20 different
stocks or bonds or a combination of them. For an individual such diversification reduces the
risk but can demand a lot of effort and cost. Each purchase or sale invites a cost in terms of
brokerage or transactional charges such as demat account fees in India. The need to possibly
sell 'poor' stocks/bonds and buy 'good' stocks/bonds demands constant tracking of news and
performance of each company they have invested in. Mutual funds are able to maintain and
track a diversified portfolio on a constant basis with lesser costs. This is because of the
pecuniary economies that they enjoy when it comes to trading and other transaction costs;
thirdly, funds also provide good liquidity. An investor can sell her/his mutual fund
investments and receive payment on the same day with minimal transaction costs as
compared to dealing with individual securities, this totals to superior portfolio returns with
minimal cost and better liquidity.
In India one can gain additional benefit by investing through mutual funds tax savings.
Investment in certain types of funds such as Equity Linked Tax Savings Schemes (ELSS)
allows for certain amount of income tax benefits.
To state in simple words, a mutual fund collects the savings from small investors, invest
them in Government and other corporate securities and earn income through interest and
MGM IOM/MBA II SEM 2016 Page

dividends, besides capital gain. It works on the principle of small drop of water makes a big
ocean.
DEFINITION:
The Securities and Exchange Board of India (Mutual Funds) Regulation, 1993 defines a
mutual fund a fund established in the form of a trust by a sponsor, to raise monies by
the trustees through the sale of units to the, public, under one or more schemes, for
investing in securities in accordance with these regulations
According to Weston J. Fred and Brigham, Eugene, F, Unit trusts are corporations
which accept dollars from savers and then use these dollars to buy stock, long term
bonds, short term debt instruments issued by business or government units; these
corporations pool funds and thus reduce risk by diversification
Advantages:
Mutual funds have advantages over investing directly in individual securities
Increased diversification: A fund normally holds many
securities; diversification decreases risk.
Daily liquidity: Shareholders of open-end funds and unit investment trusts may sell their
holdings back to the fund at the close of every trading day at a price equal to the closing
net asset value of the fund's holdings.
Professional investment management: Open-and closed-end funds hire portfolio

managers to supervise the fund's investments.
Ability to participate in investments that may be available only to larger investors. For
example, individual investors often find it difficult to invest directly in foreign markets.
Service and convenience: Funds often provide services such as check writing.
Government oversight: Mutual funds are regulated by the SEC
Ease of comparison: All mutual funds are required to report the same information to
investors, which makes them easy to compare.
Disadvantage:

Mutual funds have disadvantages as well, which include:
Fees
Less control over timing of recognition of gains
Less predictable income
No opportunity to customize
Types of mutual fund:
1. Open-end funds
Open-end mutual funds must be willing to buy back their shares from their investors at the
end of every business day at the net asset value (NAV) computed that day. Most open-end
funds also sell shares to the public every day; these shares are also priced at NAV. A
professional investment manager oversees the portfolio, buying and selling securities as
appropriate. The total investment in the fund will vary based on share purchases, share
redemptions and fluctuation in market valuation. There is no legal limit on the number of
shares that can be issued.
Open-end funds are the most common type of mutual fund. At the end of 2014, there were
7,923 open-end mutual funds in the United States with combined assets of $15.9 trillion.
2. Closed-end funds:
Closed-end funds generally issue shares to the public only once, when they are created
through an initial public offering. Their shares are then listed for trading on a stock exchange.
Investors who no longer wish to invest in the fund cannot sell their shares back to the fund (as
they can with an open-end fund). Instead, they must sell their shares to another investor in the
market; the price they receive may be significantly different from NAV. It may be at a
"premium" to NAV (i.e., higher than NAV) or, more commonly, at a "discount" to NAV (i.e.,
lower than NAV). A professional investment manager oversees the portfolio, buying and
selling securities as appropriate.
At the end of 2014, there were 568 closed-end funds in the United States with combined
assets of $289 billion.
3. Unit investment trusts
Unit investment trusts (UITs) can only issue to the public once, when they are created. UITs
generally have a limited life span, established at creation. Investors can redeem shares
directly with the fund at any time (similar to an open-end fund) or wait to redeem them upon
the trust's termination. Less commonly, they can sell their shares in the open market. Unit
investment trusts do not have a professional investment manager; their portfolio of securities
is established at the UIT's creation and does not change.

At the end of 2014, there were 5,381 UITs in the United States with combined assets of $101
billion.
4. Exchange-traded funds
A relatively recent innovation, exchange-traded funds (ETFs) is structured as open-end

investment companies or UITs. ETFs are part of a larger category of investment vehicles
known as "exchange-traded products" (ETPs), which, other than ETFs, may be structured as a
partnership or grantor trust or may take the form of an exchange-traded note. Non-ETF
exchange-traded products may be used to provide exposure to currencies and commodities.
ETFs combine characteristics of both closed-end funds and open-end funds. ETFs are traded
throughout the day on a stock exchange. An arbitrage mechanism is used to keep the trading
price close to net asset value of the ETF holdings.
Most ETFs are passively managed index funds, though actively managed ETFs are becoming
more common.
People who can invest in mutual funds:
(a)Resident Indian individuals
(b) Indian companies, trusts and charitable intuitions
(c) Banks and insurance companies
(d) Provident funds, super annuation and gratuity.
(e) Non resident Indians
(f) Overseas corporate bodies and SEBI approved FIIs.
(g) Foreign citizens and entities are not allowed to invest.


2. OBJECTIVE OF PROJECT:
1. To study the tax saving scheme in mutual fund.
2. To study the various investment option and the investment pattern.
3. To study the awareness of mutual fund.

3. METHODOLOGY
1. Research Design
Exploratory Research Design
1. Primary Data
The data was collected with the help of Online Questionnaire.
2. Secondary Data
The Information about tax saving scheme in mutual fund was obtained by
secondary data through various sources as Websites, Journal and Other References.
3. Sample Design
Design used was Randomisation
4. Population
The population was size 52
5. Sample Size
The Sample size was 52 samples
6. Sample Area
All over India
4. DATA SOURCES:

TAX PLANNING AND MUTUAL FUND
Investors in India have option for the tax-saving mutual fund schemes for the simple reason
that it helps them to save money. The tax-saving mutual funds or the equity-linked savings
schemes (ELSS) receive certain tax exemptions under Section 80C of the Income Tax Act.
That is one of the reasons why the investors in India add the tax-saving mutual fund schemes
to their portfolio. The tax-saving mutual fund schemes are one of the important types of
mutual funds in India that investors can option for. There are several companies in India that
offer tax saving mutual fund schemes in the country.
Tax saving is important, especially when investors can save up to Rs. 51,912 in taxes! Section
80C of the Income Tax Act, 1961 provides options to save tax by reducing the taxable income
by up to Rs. 1.50 Lakh. But, wealth creation is also important. Isn't it? That's why these
solutions are ideal for investors who would like to create wealth along with tax saving.
Slap Rate of Tax Saving
Parameter PPF NSC ELSS
Tenure 15 years 6 years 3 years
Returns (Compounded Annually) (Compounded Not assured

dividends/
8.80 % half-yearly) returns
8.60 to 8.90 %
Minimum RS.500 Rs.100 Rs.500

investments
Maximum Rs.150000 No limit No limit

investments
Amount eligible for Rs.150000 Rs.150000 Rs.150000
deduction under
Section 80C
Taxation for interest Tax free Taxable Dividends and

capital gain tax
free

Safety/ Rating Highest Highest High Risk
While planning our investments we spend a considerable amount of time evaluating various
options and determining which suits us the best. But when it comes to planning out
investments from a tax saving perspective, more often than not, we simply go the traditional
way and do the exact same thing that we did in the earlier years. Well, in case you were not
aware the guidelines governing such investments are a lot different this year and lethargy on
your part to rework your investment plan could cost you dear.
Types of Mutual Funds Schemes in India
Wide variety of Mutual Fund Schemes exists to cater to the needs such as financial
position, risk tolerance and return expectations etc. Being a collection of many stocks,
investors can go for picking a mutual fund might be easy. There are over hundreds of mutual
funds scheme to choose from.
It is easier to think of mutual funds in categories, mentioned below.
By Structure
Open - Ended Schemes

Close - Ended Schemes
By Investment Objective
Growth Schemes
Income Schemes
Balanced Schemes
Money Market Schemes

Other Schemes
Tax Saving Schemes
Special Schemes
Index Schemes
Sector Specific Schemes

MUTUAL FUND INVESTING STRATEGIES:
1. Systematic Investment Plans (SIPs)

These are best suited for young people who have started their careers and need to build
their wealth. SIPs entail an investor to invest a fixed sum of money at regular intervals in
the Mutual fund scheme the investor has chosen, an investor opting for SIP in xyz Mutual
Fund scheme will need to invest a certain sum on money every month/quarter/half-year in
the scheme.
2. Systematic Withdrawal Plans (SWPs)

These plans are best suited for people nearing retirement. In these plans, an investor
invests in a mutual fund scheme and is allowed to withdraw a fixed sum of money at
regular intervals to take care of his expenses
3. Systematic Transfer Plans (STPs)

They allow the investor to transfer on a periodic basis a specified amount from one
scheme to another within the same fund family meaning two schemes belonging to the
same mutual fund. A transfer will be treated as redemption of units from the scheme from
which the transfer is made. Such redemption or investment will be at the applicable NAV.
This service allows the investor to manage his investments actively to achieve his
objectives. Many funds do not even charge any transaction fees for his service an added
advantage for the active investor.
STRUCTURE OF MUTUAL FUND IN INDIA:

THE PLAYERS
Investor
SEBI

ASSET MANAGEMENT COMPAN
Custodian
Registrar
Mutual Funds in India follow a 3-tier structure. There is a Sponsor (the First tier),
who thinks of starting a mutual fund. The Sponsor approaches the Securities & Exchange
Board of India (SEBI), which is the market regulator and also the regulator for mutual funds.
SEBI checks whether the person is of integrity, whether he has enough experience in the
financial sector, his net-worth etc. Once SEBI is convinced, the sponsor is allowed to create a
Public Trust (the Second tier) as per the Indian Trusts Act, 1882. Trusts have no legal identity
in India and cannot enter into contracts, hence the Trustees are the people authorized to act
on behalf of the Trust. Contracts are entered into in the name of the Trustees. Once the Trust
is created, it is registered with SEBI after which this trust is known as the mutual fund. It is
important to understand the difference between the Sponsor and the Trust. They are two
separate entities. Sponsor is not the Trust; i.e. Sponsor is not the Mutual Fund. It is the Trust
which is the Mutual Fund. The Trustees role is not to manage the money. Their job is only
to see, whether the money is being managed as per stated objectives. Trustees may be seen as
the internal regulators of a mutual fund.
ASSET MANAGEMENT COMPANIES (AMC)
AMC forms the third tier of the mutual fund structure. Trustees appoint the Asset
Management Company (AMC), to manage investors money. The AMC in return charges a
fee for the services provided and this fee is borne by the investors as it is deducted from the
money collected from them. The AMCs Board of Directors must have at least 50% of
Directors who are independent directors. The AMC has to be approved by SEBI. The AMC
functions under the supervision of its Board of Directors, and also under the direction of the
Trustees and SEBI.
It is the AMC, which in the name of the Trust, floats new schemes and manages these
schemes by buying and selling securities. In order to do this the AMC needs to follow all
rules and regulations prescribed by SEBI and as per the Investment Management Agreement
it signs with the Trustees. If any fund manager, analyst intends to buy/ sell some securities,
the permission of the Compliance Officer is a must. A compliance Officer is one of the most
important persons in the AMC. Whenever the fund intends to launch a new scheme, the AMC
has to submit a Draft Offer Document to SEBI. This draft offer document, after getting SEBI
approval becomes the offer document of the scheme.

The Offer Document (OD) is a legal document and investors rely upon the
information provided in the OD for investing in the mutual fund scheme. The Compliance
Officer has to sign the Due Diligence Certificate in the OD. This certificate says that all the
information provided inside the OD is true and correct. This ensures that there is
accountability and somebody is responsible for the OD. In case there is no compliance
officer, then senior executives like CEO, Chairman of the AMC has to sign the due diligence
certificate. The certificate ensures that the AMC takes responsibility of the OD and its
contents.
CUSTODIAN
A custodians role is safe keeping of physical securities and also keeping a tab on the
corporate actions like rights, bonus and dividends declared by the companies in which the
fund has invested. The Custodian is appointed by the Board of Trustees. The custodian also
participates in a clearing and settlement system through approved depository companies on
behalf of mutual funds, in case of dematerialized securities. In India today, securities and
units of mutual funds are no longer held in physical form but mostly in dematerialized form
with the Depositories. The holdings are held in the Depository through Depository
Participants (DPs). The deliveries and receipt of units of a mutual fund are done by the
custodian or a depository participant at the instruction of the AMC and under the overall
direction and responsibility of the Trustees. Regulations provide that the Sponsor and the
Custodian must be separate entities.
The Best Debt Mutual Funds to invest now?

1. UTI Equity Fund
Fund Objective: This mutual fund objective is to invest at least 80% of its funds in
equity and equity related instruments with medium to high risk and balance 20% in
debt instruments with low to medium risk profile.

Fund Performance: This fund has beaten its peers and provided 12% annualised
returns in last 5 years. If you have invested in this fund for Rs 1,000 per month
through SIP for 5 years, your total investment would have been Rs 60,000 and your
investment value would have been Rs 94,900 now. I had recommended this fund last
year and it continues to be another best fund to invest for long term of 10-20 years.
Why to invest: The fund has provided low volatility returns through a difficult period
in equity markets. The strategy is clearly articulated and has delivered exactly what it
promised. This fund has provided 12% annualised returns in last 5 years compared to
S&P BSE 100 returns of 5.8%. This has given 15.5% returns in last 10 yars compared
to S&P BSE 100 returns of 12.2%. This is one of the oldest fund of 22 years of
history and performed well even in bear markets.
2. ICICI Pru Focussed Blue Chip Fund
Fund Objective: This mutual fund objective is to invest in 20 large cap companies
from the top 200 stocks listed on the NSE on the basis of market capitalization. This
fund's objective would get altered if assets cross more than 1,000 Crores (which we
are seeing now) where it would invest beyond 200 stocks listed in the NSE.
Fund Performance: This fund has beaten all its peers and provided 11% annualised
investment value would have been Rs 89,200 now. Recently this fund has lagged in
performance compared to its peers, however, I still believe this is one of the best
performing mutual fund to invest for long term of 10-20 years.
Why to invest: This fund has a clear strategy and consistently performing in the long
run. This fund beats all its peers and provided 11% annualised returns in the last 5

years comparing to CNX Nifty returns of 6.05% in a similar period. This makes this
as a unique fund among its peers. Hence, this is one of the top mutual funds to invest.
3. Birla SL Frontline Equity Fund
Fund Objective: This fund aims to generate long term growth of capital by
diversifying across various industries/sectors in BSE 200.
Fund Performance: This fund has beaten its peers and provided 11.2% annualised
investment value would have been Rs 94,040 now. This is another top fund to invest
for long term of 10+ years.
Why to invest: This MF scheme is a consistent performer. In long run of 10 years, it

has given 17.8% annualized returns against S&P BSE 200 which just gave 12%
annualized returns. This has never lagged in last 10 years and winner in various
investment cycles. This is one of the consistent top performing mutual fund to invest
in 2016 as it has performed well in various market cycles over a decade.
4. Franklin India Smaller Companies Fund
Fund Objective: This funds objective is to generate long-term capital appreciation

from a portfolio of mid-cap and small-cap companies. It invests upto 75% in smaller
companies.

Fund Performance: This fund has beaten its benchmark and provided 19%
annualised returns in last 5 years. If you have invested in this fund for Rs 1,000 per
month through SIP for 5 years, your total investment would have been Rs 60,000 and
your investment value would have been Rs 130,650 now. This is one of the best
performing funds to invest for long term of 8-10 years. This is one of the higest return
mutual fund which provided 30% annualised returns in last 3 years.
Why to invest: This fund differentiates itself from market cap orientation. This fund
invests smaller portion in large cap and invests a sizeable amount in small companies,
hence it can be termed as smaller stock fund. This fund performed excellent in last 5
years and given 19% annualised return comparing to CNX Midcap benchmark of
7.1%. In my personal view, this is one of the top mutual funds to invest in mid-
cap/small-cap segment.
5. Mirae Asset Equities Blue Chip Fund
Fund Objective: This fund aims to generate income and capital appreciation from a
diversified portfolio predominantly investing in Indian equities and equity related
securities of companies which are not part of the top 100 stocks by market
capitalization and have market capitalization of atleast Rs.100 Crores at the time of
investment.
Fund Performance: This is new entrant in to my top 10 best performing funds. This
fund has beaten its benchmark and provided 22% annualised returns in last 5 years. If
you have invested in this fund for Rs 1,000 per month through SIP for 5 years, your
total investment would have been Rs 60,000 and your investment value would have
been Rs 128,500 now. This is one of the good funds to invest for long term of 8-10
years.
Why to invest: This fund performed well in last 5 years and given 22% annualised
return comparing to CNX Midcap benchmark of 7.1% and overall category average of
13.8%.

6. UTI Mid Cap Fund

Fund Objective: This mutual fund scheme objective is to provide 'Capital
appreciation' by investing primarily in mid cap stocks.
Fund Performance: This fund has beaten its benchmark and provided 17.8%
your investment value would have been Rs 126,700 now. This is one of the best mid-
cap funds to invest for long term of 8-10 years. This is one of the best performing
mutual funds which gave 19% annualised returns in last 2 years.
Why to invest: This fund invests majority in mid-cap funds which outperforms in
shorter duration if one invests in the right mid-cap stocks. This fund performed
excellent in last 5 years and given 17.8% annualised return comparing to CNX
Midcap benchmark of 7%. High risk investors can invest in best performing mid-cap
funds through SIP.
7. ICICI Pru Value Discovery Fund
Fund Objective: This fund aims to invest in a well-diversified portfolio of value

stocks which are having attractive valuations in relation to earnings or book value or
current and/or future dividends.
Fund Performance: This fund has beaten its benchmark and provided 17%
your investment value would have been Rs 114,400 now. This is one of the top
performing funds to invest in India for long term of 8-10 years.

Why to invest: ICICI Pru Value Discovery is actually a market-cap agnostic fund that
practises classic value investing. The fund beaten records when the markets have
reversed directions unexpectedly. This fund performed excellent in last 5 years and
given 17% annualised return comparing to CNX Midcap benchmark of 7.1%. Even in
last 10 years it generated 19.3% annualized returns compared to its CNX Mid-cap
bnenchmark of 13%. If you want to play safe and reduce losses in a downturn and
make the most in bull run, you should own this mutual fund scheme.
8. Franklin (I) High Growth Cos fund
Fund Objective: The fund invests

in Indian companies/sectors with
high growth rates or potential. It
will focus on companies offering the best trade-off between growth, risk and
valuation.
your investment value would have been Rs 114,700 now. This is one of the best funds
to invest for long term of 8-10 years. This is another good highest return mutual fund
that provided over 30% returns in last 3 years.
Why to invest: This fund performed well in last 5 years and given 15% annualised
return comparing to CNX 500 benchmark of 6.29% and overall category average of
9%. This invests in various sectors and hence this multi-cap is expected to perform
well in future too.
9. HDFC Balanced Fund
Fund Objective: This mutual fund scheme aims to generate capital appreciation from

a combined portfolio of equity and debt instruments. This scheme invests up to 60%
in equity and balance in debt related instruments.
your investment value would have been Rs 96,900 now.
Why to invest: This fund performed well in last 10 years and given 16.3% annualised
return comparing to balanced fund category of 10.8%. Equity centric balanced funds
limit volatility by keeping part of investments in fixed income and regularly
rebalancing the portfolio. This fund re-balances its portfolio with an aggressive equity
part.
10. ICICI Balanced Fund
Fund
Objective: The
scheme invests in
equities and related
securities as well as
fixed income and money market securities. It invests 60% minimum in equity and
balance in debt related instruments.
your investment value would have been Rs 95,600 now.
Why to invest: This fund performed well in last 10 years and given 14.5% annualised
return comparing to balanced fund category of 6.3%. It would reduce risk by
investing part of the investment in debt instruments.

INTERPRETATION
1.1.Age
Table.1.1
Particular Percentage
Under 25 34.6
25 to 34 25
35 to 44 13.5
45 to 54 19.2
Other 7.7
Total 100
Fig.1.1
Under 25 25 to 34 35 to 44 45 to 54 Other
8%
19% 35%
14%
25%
Interpretation:As per above the table 34.6% of investors are in the age of 25, 25% are
between 25 to 34 , 13.5% are between 35 to 44 ,19% are between 45 to 54 age and 35% are
more than 55.
1.2. Gender

Table.1.2
Male 55.8%
Female 44.2%
Total 100
Fig.1.2
Gender
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Male Female
Interpretation: 55.8% of investor are male and 44.2% are female prefer the mutual funds.
1.3. Marital Status
Table.1.3
Married 53.8
Unmarried 46.2
Total 100
Fig.1.3

Marital Status
Unmarried; 46%
Married ; 54%
Interpretation: 54% investors are married and 46% are unmarried.
1.4. Academic Qualification
Table.1.4
Graduate 11.5
Post Graduate 53.8
Professional 34.6
Total 100
Fig.1.4

60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Graduate Post Graduate Professional
Interpretation: From the above diagram and information 11.5% investor are graduate,
53.8% are post graduate and 34.6% are professional.
1.5. Occupation
Table.1.5
Professional 15.4
Pvt.Firm Employees 13.5
Self Employed 19.2
Business Person 17.3
Other 34.6
Total 100
Fig.1.5

Occupation
Professional; 15%
Others; 35%
Pvt.Firm Employees; 14%
Self Employed ; 19%

Business Person; 17%
Interpretation: 15.4% professional by qualification, 13.5% are in pvt.firm employee, 19.2%

are self-employed, 17.3% are business person and 34.6% are form other.
1.6.Youbelong to which one of the following category.
Table:1.6
Professional 15.4
Pvt.Firm Employees 13.5
Self Employed 19.2
Business Person 17.3
Other 34.6
Total 100
Fig.1.6

40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Interpretation: 15.4% investors are belong to professional category,13.5% are belong to

pvt.firm employees,19.2% are belong to Self-employed,17.3% belong to business person and
34.6% belong from other.
1.7.Your annual income is in the range of?
Table.1.7
Below Rs.1 lakh 23.1
Between 1 lakh to 2 lakh 13.5
Above 5 lakh 23.1
Total 100
Fig.1.7

25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Interpretation: From the above diagram and information 23.1% of investor have below
1lakh income, 13.5% between 1 lakh to 2 lakh, 13.5% between 2 lakh to 3 lakh, 23.1%
between 3 lakh to 4 lakh, 9.6% between 4 lakh to 5 lakh and 23.1% above 5 lakhs.
1.8. Wheredo you invest your saving?
Table.1.8
Saving bank 30.8
Fixed deposit 23.1
Gold/Silver 11.5
Real estate 9.6
Insurance 7.7
Other 17.3
Total 100
Fig.1.8

Others; 17%
Saving Bank ; 31%
Insurance; 8%
Real Estate ; 10%
Gold/Silver ; 12%
Fixed Deposit ; 23%
Interpretation:31% of investors prefer their investment in Saving Bank, 23% in fixed

deposit, 11.5% in gold and silver, 9.6% in real estate, 7.7% in insurance and 17.3% in others.
1.9. What is the percentage of saving from your total income?
Table.1.9
25% Saving 61.5
50% Saving 21.2
75% Saving 9.6
Other 7.7
Total 100
Fig.1.9

70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
25% Saving 50% Saving 75% Saving Others
Interpretation:61.5% investors invest their 25% of income in mutual funds.
1.10.what are the factors to which you give priority when you invest?
Table.1.10
Safety 46.2
High Return 21.2
Less Risk 15.4
Marketability 9.6
Others 7.6
Total 100
Fig.1.10

Others; 8%
Marketability; 10%
Safety ; 46%
Less Risk; 15%
High Return; 21%
Interpretation: From the above diagram and information the 46% of investors give priority
to safety, 21% high return,15% less risk ,10% marketability and 8% others.
1.11. You invest in the financial instruments/securities which give
Table.1.11
High Risk/High Returns 17.3
Low Risk/Low Returns 17.3
Low Risk/High Returns 65.4
Total 100
Fig.1.11

70
60
50
40
30
20
10
0
Interpretation: From the above diagram the 65% of investors invest their funds in low risk
high return, 17.3% low risk low return and 17.3% high risk high returns.
1.12. Do you know about Mutual Funds?
Table.1.12
Yes 94.2
No 5.8
Total 100
Fig.1.12

No; 6%
Yes; 94%
Interpretation: 94% of investments are aware of mutual funds and 6% are not aware of it.
1.13. How is your invest pattern?
Table.1.13
Monthly (SIP) 30.8
Once in Six Months 23.1
Once in a year 21.2
Very Rare 25
Total 100
Fig.1.13

35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Interpretation: From the above diagram and information 30.8% investors are investing their
funds in monthly (SIP), 23% once in six month, 21.2% once in a year and 25% are investing
very rare.
1.14. You have invested in which type of Mutual Funds Scheme?
Table.1.14
Equity Fund 51.9
Debt Fund 17.3
Hybrid Fund 30.8
Total 100
Fig.1.14

Hybrid Fund; 31%
Equity Fund; 52%
Debt Fund; 17%
Interpretation: From the above diagram the 52% of investor are prefer their investment in
equity fund, 31% prefer hybrid and 17% prefer debt fund.
1.15. Do you have knowledge about the share market & its functioning?
Table.1.15
Yes 98.1
No 1.9
Total 100
Fig.1.15

2%
Yes
No
98%
Interpretation: 98% of investors have knowledge about share market and its functioning and
2% of investors are not aware of share market and its functioning.
1.16. Are you aware of the fact the Mutual Fund companies will invest your money in
share market?
Table.1.16
Yes 84.6
No 15.4
Total 100
Fig.1.16

90 84.6
80
70
60
50
40
30
20 15.4
10
0
Yes No
Interpretation: From the above diagram the 84.6% investors are aware of mutual fund
companies will invest their investment in share market. 15.4% are not aware of it.
1.17. What advantages do you find when you invest in Mutual Funds? Give Priority?
Table.1.17
Professional Management 11.5
Diversification 32.7
Return Potential 25
Other 30.8
Total 100

Fig.1.17
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Interpretation: 32% of investors prefer the mutual fund for diversification, 25% for return
potential, 11.5% professional management and 32% others.
1.18. Where do you gather information about the performance of different mutual fund
schemes?
Table.1.18
Financial Institute 19.2
Brokers 19.2
T.V.Channels 13.5
Internet 34.6
Others 13.5
Total 100

Fig.1.18
14% 19%
Financial Institutions
Brokers
TV Channels
19% Internet
35%
Others
14%
Interpretation: From the above diagram and information it is considered that, 35% of
investors are prefer the information of mutual fund from internet and 19% investors prefer
Financial Institution, 19% broker, 13 TV channel and 14% from other.
1.19. Since how many years you are investing in mutual fund schemes?
Table.1.19
1 year 32.7
2 year 17.3
3 year 21.2
4 year 21.2
More than 5 year 7.6
Total 100

Fig.1.19
Investment in Mutual Fund Scheme
1%
0% 1 year
15%
2 year
3 year
42% 4 year
More than 5 year
42%
Interpretation: Most of the investor are investing in mutual fund more than 4 years and
other are below 4 years.
1.20. Can mutual fund is viewed as risk free investments?
Table.1.20
Yes 67.3
No 32.7
Total 100

Fig.1.20
67.30%
32.70%
Ye s No
Interpretation: As per the above table the 67% of investor prefer that mutual fund is risk
free investment and 32.7% investor prefer mutual as a risk investment
5. FINDINGS
Objective 1
1. To study the tax saving scheme in mutual fund.

Tax planning may seem like a tedious exercise requiring lot of efforts that may make
an ordinary investor nervous at the first glance. Equity fund offers a simple way to get
tax benefits and at the same time get an opportunity to gain from the potential of
Indian equity market.

Objective 2
2. To analyse the performance of various mutual funds schemes and suggest the best
one.
Those my project on mutual fund, it is found that 54% of the people still prefer to
invest their money in banks or fixed deposit.
Fig. 1.9 & 1.10 says that minimum 10% people put their larger amount i.e. 75% in
savings. Where they will get high return and lots of safety.so we can say that the
popular investment option are those which give high return and more safety.
According to Fig. 1.13 the investment pattern shows that maximum respondent prefer
(SIP) and would like to go for hybrid fund and equity fund, as this having
diversification and good return potential. It is also observed that nearly half of the
respondent has been investing in mutual fund for 4 year or more than 4 year.
Objective 3
3. To study the potential of mutual fund.

According to Fig. 1.1, 1.12, 1.15 and 1.16 there is a good awareness amongst the
customer about the mutual fund and hence 60% of the total respondents have said that
they are investing 25% of their total saving in mutual fund. 94% of the respondents
are aware of mutual funds.
We may also infer from Fig. 1.10 & 1.11 that people are aware about the mutual fund
and maximum of the people prefer to safety and high return.21% enhance they would
invest in mutual fund.65% people have also agreed that they would like to invest low
risk and high return.
6. SUGGESTION
The mutual fund company should come out with more funds and with more
hybrid fund. As maximum people would like to invest in this fund due to less
risk.
If your risk tolerance level is high and you have a long investment horizon,
then Equity Linked Savings Schemes, commonly known as Tax Saver funds
are the ideal investment options for Section 80C tax saving. No other
investment option in Section 80C can match the returns of ELSS funds over a
long investment horizon. Returns of ELSS funds are tax free in the hands of
the investor.

The people are becoming aware about the mutual fund, because of financial
institute, brokers, T.V. channels and internet. But Mutual Fund Companyneed
to educate and create more awareness amongst the people.
BIBLIOGRAPHY
Websites:
www.mutualfundsindia.com
www.moneycontrol.com
Journals & other references:
The Economic Times
Business Standard
Security analysis and portfolio management work book
Fact sheet and statements of various fund houses.


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A Study of Tax Saving Scheme in Mutual Fund

MGM IOM/MBA II SEM 2016 Page

Professional investment management: Open-and closed-end funds hire portfolio

Government oversight: Mutual funds are regulated by the SEC

MGM IOM/MBA II SEM 2016 Page

Mutual funds have disadvantages as well, which include:

Less control over timing of recognition of gains

Less predictable income

Types of mutual fund:

3. Unit investment trusts

MGM IOM/MBA II SEM 2016 Page

A relatively recent innovation, exchange-traded funds (ETFs) is structured as open-end

People who can invest in mutual funds:

(a)Resident Indian individuals

(b) Indian companies, trusts and charitable intuitions

(c) Banks and insurance companies

(d) Provident funds, super annuation and gratuity.

(e) Non resident Indians

(f) Overseas corporate bodies and SEBI approved FIIs.

(g) Foreign citizens and entities are not allowed to invest.

MGM IOM/MBA II SEM 2016 Page

MGM IOM/MBA II SEM 2016 Page

1. To study the tax saving scheme in mutual fund.

2. To study the various investment option and the investment pattern.

3. To study the awareness of mutual fund.

MGM IOM/MBA II SEM 2016 Page

MGM IOM/MBA II SEM 2016 Page

TAX PLANNING AND MUTUAL FUND

Slap Rate of Tax Saving

Parameter PPF NSC ELSS

Tenure 15 years 6 years 3 years

Returns (Compounded Annually) (Compounded Not assured

Minimum RS.500 Rs.100 Rs.500

Maximum Rs.150000 No limit No limit

Amount eligible for Rs.150000 Rs.150000 Rs.150000

Taxation for interest Tax free Taxable Dividends and

MGM IOM/MBA II SEM 2016 Page

Safety/ Rating Highest Highest High Risk

Types of Mutual Funds Schemes in India

It is easier to think of mutual funds in categories, mentioned below.

Open - Ended Schemes

Money Market Schemes

MGM IOM/MBA II SEM 2016 Page

MUTUAL FUND INVESTING STRATEGIES:

1. Systematic Investment Plans (SIPs)

2. Systematic Withdrawal Plans (SWPs)

3. Systematic Transfer Plans (STPs)

STRUCTURE OF MUTUAL FUND IN INDIA:

MGM IOM/MBA II SEM 2016 Page

MGM IOM/MBA II SEM 2016 Page

ASSET MANAGEMENT COMPANIES (AMC)

MGM IOM/MBA II SEM 2016 Page

The Best Debt Mutual Funds to invest now?

MGM IOM/MBA II SEM 2016 Page

2. ICICI Pru Focussed Blue Chip Fund

MGM IOM/MBA II SEM 2016 Page

3. Birla SL Frontline Equity Fund

Why to invest: This MF scheme is a consistent performer. In long run of 10 years, it

4. Franklin India Smaller Companies Fund

Fund Objective: This funds objective is to generate long-term capital appreciation

MGM IOM/MBA II SEM 2016 Page

5. Mirae Asset Equities Blue Chip Fund

MGM IOM/MBA II SEM 2016 Page

6. UTI Mid Cap Fund