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Investing in Franklin Templeton funds can reduce your tax burden in 2 ways

Tax rebates while investing
Concessional tax on your long-term capital gains

Tax rebates through Section 88

Section 88 is where you can invest upto Rs.70,000 in Franklin Templeton funds each year and get a tax rebate of upto Rs.14,000.

Franklin Templeton offers you two schemes - Franklin India Taxshield (FIT) an open end equity linked savings scheme and Templeton India Pension Plan (TIPP), an open end pension scheme - to help you save tax under Section 88.

Templeton India Pension Plan (TIPP)

Objective

Investment 

recommended

To help individuals plan for retirement, while giving their investment the potential for growth Rs.60,000

Pension Plan is an open end scheme designed to help individuals save during their income earning years to secure a comfortable retirement. With a balanced allocation of upto 40% in equities and the rest in high quality fixed income instruments, Pension Plan has the potential to deliver steady capital appreciation over the long term.

NAV Performance

  Last 1 year Last 3 years* Last 5 years* Since Inception*
TIPP (G) 12.96% 9.57% 11.73% 12.50%
TIPP (D) 13.00% 9.57% 11.73% 12.50%

* Annualised Compounded returns based on 31.12.2002 NAVs

Past Performance may or may not be sustained in future. Dividends declared assumed to be reinvested

How does Pension Plan compare with PPF?

  Pension Plan PPF
Returns 13.0%*taxable 8% tax-free
Minimum lock-in period 3 years 5 years
Potential for capital appreciation Yes No
Maximum investment

Rs. 70,000

Rs. 60,000

* One year returns based on 31.12.2002 NAV of Rs. 19.70 Annualised compounded returns : Three years - 9.6% ; Five years - 11.7% ; Since inception - 12.5%. Past performance is not an indicator of future performance and does not provide a basis for comparison with other instruments.

Concessional Long Term Capital Gains Tax

If your investment in Franklin Templeton Funds is held for over one year, you qualify for concessional capital gains tax where you have a choice of two options:

You can pay tax at a flat rate of 10%
              or
You can pay tax at a rate of 20% after adjusting the cost of acquisition by Cost Inflation Index as notified by the Central Government

Advantages of saving tax with Franklin Templeton

Scope for capital appreciation :
With an allocation to equities, these schemes have the potential to deliver capital appreciation over the long term

Flexible withdrawal options :
Investments in FIT can be redeemed at NAV after a short lock-in period of 3 years. While Pension Plan is designed to help you save for retirement and redemptions at NAV can start after the age of 58, you also have the facility to redeem your investment after completion of 3 financial years to meet any emergencies. 

Convenience :  
The minimum investment amount is just Rs.500 and you can make your investments through out the year.

 

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