What is the utility of a recognised pension fund like Templeton India Pension Plan. This particular fund is a predominantly debt oriented fund (60-100% debt and 0-40% equity) and contribution in this fund has tax savings.

My query is:
1. How does this compare with the NPS (new pension scheme)?
2. Does this fund and possibly other recognised pension funds attract the same EEE regimen like PPF, NPS, etc under the DTC revised rules?

4 Answers

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1 Manish Chauhan November 23, 2010 at 10:28 pm

So in a way this looks good to me considering it has 40% allocation to equity . However if compare it to NPS , NPS is designed to give pensions from retirement date and this fund will start giving pensions in form of dividend from the date you start invest in this .

It is nothing but a debt fund with max 40% equity exposure . The only good thing about this fund would be that it is made for investors who want to invest for long term as it penalises if you want to get out of the fund before you are 58 yrs old .

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2 Ramesh Mangal November 24, 2010 at 11:28 am

Thanks for the answer.

But I still cannot get the confirmation whether this fund will continue to be included in EEE as per DTC.


3 Manish Chauhan November 24, 2010 at 11:59 am

Are they in EEE at the moment ?


4 Ramesh Mangal November 24, 2010 at 12:21 pm

Before NPS and apart from ELSS, TIPP was probably the only other tax-saving instrument with equity exposure.
I was wrong in the perception that it was included in EEE in absolute terms. But, the dividends are tax-free and with the relative better tax treatment of this fund (by using indexation), it is a very good option.
As per me, the other pros as compared to NPS are that the equity component is not restricted to only the Nifty index. Also, you start getting a reasonable amount of money on a per year basis.
The cons are much higher expense ratio, max equity to 40 instead of 50%.


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