Fund managers line up ELSS schemes

Soon after the finance ministry cleared the haze on tax treatment of equity linked savings scheme, fund managers are lining up such policies to tap investors eager to participate in the stock market boom and simultaneously save tax.

Fidelity Fund Management is coming up with an open-ended Tax Advantage Fund on January 5, and many more are set to follow suit.

The companies that launched ELSS before the ministry issued the notification in December included Kotak, Reliance and Chola MF.

ABN Amro AMC has also launched an ELSS scheme recently. Industry sources said Tata Mutual Fund is also planning an ELSS, and many other Funds are waiting.

Though Fidelity had obtained SEBI approval for the ELSS scheme in October, the mutual fund is launching the scheme now in order to safeguard investors' interest, Fidelity country head Ashu Suyash said in a statement.

Fidelity, whose tax savings schemes are chart busters in countries like UK, is eyeing the ELSS segment in India as well.

"We are of firm belief that ELSS will be a category builder in India," Suyash said. The fund will have a 3-year lock in period and offer systematic investment plans to enable investors invest small amounts and save tax.

The proposed fund, which will invest in equities and equity-related securities, opens for subscription on January 5 and closes on January 31.