Tax Planning With ICICI Prudential Mutual Fund
by Arnab Dey Finance 04 January 2024
Indian investors are lucky to have many companies providing various mutual fund options, and ICICI Prudential is one of them.
ICICI Prudential AMC is a collaboration between ICICI Bank and Prudential Plc., a UK-based financial services company. It was established in 1993 through a joint venture between ICICI Bank and Prudential Plc.
Prudential Group, a global insurance giant and one of the oldest and largest, is also among India’s top two Asset Management Firms. ICICI Prudential is recognized as one of the most reputable and successful mutual funds.
In this blog, we will know about ICICI prudential mutual fund in detail.
What is Tax Planning?
Tax planning is all about managing your money smartly to reduce your tax burden. This involves using legal methods like deductions and exemptions provided in the Income Tax Act of 1961.
It’s worth noting that tax planning is completely above board and doesn’t involve any shady tactics to dodge taxes. Instead, it’s a guide to help you make the most of the provisions in the Income Tax Act and save on taxes.
List of Tax-Saving Investment Options From ICICI Prudential Mutual Fund
Here are some investment options from the ICICI prudential mutual fund that can help you save on taxes in India:
1. Fixed Deposit (FD):
FDs offer a fixed interest rate and come with a lock-in period of five years. You can get a tax deduction of up to ₹1.5 lakh each year under Section 80C of the Income Tax Act, 1961. You can invest in FDs through banks or financial institutions.
2. Mediclaim or Health Insurance:
You can claim health insurance premiums deduction under Section 80D of the Income Tax Act, 1961. The amount of deduction varies depending on factors like age and who the policy covers.
3. National Savings Certificate (NSC):
NSC is a government-backed fixed-income investment that ensures a guaranteed interest rate. Investing in NSC can get you a tax deduction of up to ₹1.5 lakh each year under Section 80C of the Income Tax Act, 1961.
4. Pension Plans:
Pension plans are designed to keep you financially secure during your retirement. You can claim a tax deduction of up to ₹1.5 lakh each year for the premiums paid under Section 80CCC. It’s important to note that this deduction is part of the overall limit with Section 80C and Section 80CCD(1).
5. ULIPs (Unit Linked Insurance Plans):
ULIPs are life insurance plans that not only help your money grow but also provide life cover. You can enjoy tax benefits, including deductions on premiums and exemption on policy proceeds, as per the Income Tax Act of 1961.
6. Endowment Plans:
Endowment plans offer life coverage and a way to save for the long term. They come with tax benefits, such as deductions on premiums and exemption on policy proceeds, under the Income Tax Act of 1961.
7. Term Insurance:
Term insurance plans offer substantial coverage at affordable premiums and come with multiple tax benefits under the Income Tax Act of 1961. This includes deductions on premiums and tax exemptions on claim amounts.
8. Tax-Saving Mutual Funds:
Equity-Linked Saving Schemes (ELSS) provide deductions of up to ₹1.5 lakh each year under Section 80C. Moreover, capital gains of up to ₹1 lakh in a year from withdrawal are not taxable.
9. National Pension Scheme (NPS):
NPS offers tax benefits on contributions from both employees and employers. This includes deductions on employee contributions under Section 80CCD(1) and additional voluntary contributions under Section 80CCD(1B).
10. Public Provident Fund (PPF):
Contributions to PPF qualify for Section 80C tax deductions, and returns received are exempt under the Income Tax Act of 1961.
Who should invest in ICICI Prudential Mutual Fund?
ICICI Prudential MF ELSS Funds are a great option for those who are comfortable with taking on higher investment risks. These funds come with a relatively short lock-in period of three years, making them stand out among other tax-saving choices.
They offer a good opportunity for building wealth while enjoying tax benefits. Investors can opt for ICICI Prudential MF ELSS Funds to work towards achieving lasting goals such as funding their children’s education, planning for retirement, or buying a home.
ICICI Prudential MF Top-Rated Funds
| Fund Name | Value Research | Min. Investment | Category Returns | 3Y Returns |
| ICICI Prudential Infrastructure Direct-Growth | 4 | ₹100 | 27.39% | 41.39 |
| ICICI Prudential Small Cap Fund Direct Plan-Growth | 4 | ₹100 | 26.21% | 34.21 |
| ICICI Prudential Dividend Yield Equity Fund Direct-Growth | 3 | ₹100 | 20.44% | 32.21 |
| ICICI Prudential Value Discovery Direct-Growth | 5 | ₹100 | 19.28% | 28.28 |
| ICICI Prudential Large & Mid Cap Fund Direct Plan-Growth | 4 | ₹100 | 15.76% | 28.00 |
| ICICI Prudential Equity & Debt Fund Direct-Growth | 5 | ₹100 | 10.53% | 27.05 |
| ICICI Prudential Midcap Direct Plan-Growth | 3 | ₹100 | 19.79% | 26.34 |
| ICICI Prudential Multi Asset Fund Direct-Growth | 5 | ₹100 | 7.33% | 25.67 |
| ICICI Prudential Multicap Fund Direct Plan-Growth | 3 | ₹100 | 21.29% | 25.61 |
| ICICI Prudential Focused Equity Fund Direct-Growth | 4 | ₹100 | 8.44% | 23.92 |
Things to Check Before Investing in ICICI Prudential Mutual Funds
Here are a few things to consider before investing in ICICI prudential mutual fund.
- Feedback Matters:
Talk to experienced investors. Get insights on the fund’s reliability and any red flags from those who’ve been there. Your peace of mind is crucial.
- Know Your Fund Manager:
Look into the manager’s track record and style. Your comfort with their approach is key to a smart investment.
- Price Check:
Evaluate the fund’s price, value creation, and returns percentage.
- Watch Out for Fees:
Be clear on fees. Some charge a flat rate; others take a cut from returns. Opt for transparency; know the costs upfront.
- Past Isn’t Everything:
Past performance is a factor, but don’t let it be the sole driver. Use it as a check, not the only one, in your investment decision.”
Summing Up
This is all about ICICI prudential mutual fund. Although there are multiple benefits of investing in this fund, you should consider your risk appetite before investing money. You can reach out to us for more info about investments!
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