- Date : 06/09/2023
- Read: 3 mins
The two most anticipated mutual fund schemes of Zerodha, i.e., Tax Saver (ELSS) and normal diversified Nifty Large Midcap 250 index funds, are ready to launch.
After a month of receiving approval from SEBI (Securities and Exchange Board of India), Zerodha is finally all set to launch its Asset Management Company (AMC) in partnership with Smallcase. In April, an announcement was made by Zerodha and Smallcase about forming a joint venture to launch the Zerodha AMC business. And now, after the approval, Zerodha has filed the documents with SEBI regarding the launch of its first two schemes - Zerodha Tax Saver (ELSS) and Zerodha Nifty Large Midcap 250 Index Fund (ZN250).
Zerodha Tax Saver (ELSS) Nifty Large Midcap 250 Index Fund and Zerodha Nifty Large Midcap 250 Index Fund (normally diversified one) are two passive schemes Zerodha AMC is launching.
Under the Tax Saver scheme of Zerodha, investors can get tax deductions up to 1.5 lakh on investment.
Soon Zerodha will launch a mix of index and exchange-traded funds (ETFs).
Which schemes are being launched?
Zerodha Asset Management Ltd is the newest fund house formed after the approval of the market regulator - SEBI. As per the draft document of the scheme information signed between SEBI and Zerodha, two schemes are being launched in partnership with Smallcase.
Zerodha Tax Saver (ELSS) Nifty Large Midcap 250 Index Fund
Zerodha Tax Saver (ELSS) Nifty Large Mid-cap 250 index fund is an open-ended passive equity-linked saving scheme. It has a statutory lock-in period of 3 years. It will have tax benefit replication or will track the standard Nifty Large Midcap 250 index. These funds will be invested in the Nifty Large Midcap 250 index stocks in the same proportion as that of the Index, enjoying the tax benefits on such investments.
Zerodha Nifty Large Midcap 250 Index Fund (ZN250)
The Zerodha Nifty Large Midcap 250 Index fund (ZN250) is a Normal diversified and open-ended passive scheme. It replicates and tracks the Nifty Large Midcap 250 index. The corpus of this scheme will be invested in investment instruments related to equity, debt, money market, and other permitted instruments.
What are the tax benefits?
Both Zerodha’s Tax Saver and normal diversified equity schemes will be benchmarked against the Nifty Large Midcap 250 Index Fund. Zerodha Tax Saver scheme will allow investors to have tax deductions under section 80C of the Income Tax Act. Investors will get tax benefits up to RS 1,50,000 on their investment.
Furthermore, 95-100% of the funds under the Tax Saver scheme will be allocated to equity and equity-related instruments, and the other 5% will be allocated to debt and money market instruments. As per the industry officials, Zerodha fund house is expected to launch a mix of index funds and ETFs.
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