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Navi Mutual Fund (MF) on Tuesday launched ELSS Tax Saver Nifty 50 Index Fund. This is only the second passive tax saver fund in India, after IIFL's ELSS Nifty 50, which was launched in December 2022.
The passive ELSS launch by Navi MF comes weeks after it stopped taking fresh inflows in its active ELSS fund, a condition set by the markets regulator.
MF regulations allow fund houses to launch only one type of ELSS fund, either active or passive. Recently, the Securities and Exchange Board of India (Sebi) had clarified that fund houses that have active ELSS can start a passive one by stopping inflows into their active scheme.
"Recently, Sebi issued guidelines allowing fund houses with an existing active tax-saver ELSS scheme to launch a passive ELSS scheme post restricting inflows in the active scheme. With the launch of the Navi ELSS Tax Saver Nifty 50 Index Fund, Navi will be the first mutual fund in India, to take advantage of these guidelines," the fund house said in a press release.
Navi's passive ELSS has an expense ratio of 0.12 per cent, which is lower than every other ELSS, including the other passive offering.
Investments in ELSS qualify for deductions under Section 80C. These schemes have a lock-in period of three years.
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First Published: Tue, February 14 2023. 19:01 IST
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