Seeking Dual Benefits

Is there any index fund which is also eligible for tax benefits like ELSS? In case, the answer to the above is No, can you please let me know if there are any ELSS schemes which have a very low turnover and mirror the Nifty index closest so that there is the benefit of index investing and at the same time getting the ELSS benefit too.
-M. Anand

Currently there is just one fund that is an index based ELSS--Franklin India Index Tax Fund. It endeavours to track the S&P CNX Nifty index (Nifty). But this fund does not accept fresh subscriptions anymore. The sale of its units has been suspended with effect from August 17, 2004.

Other existing ELSS function like diversified equity schemes and may not provide the benefit of index investing. So, both the benefits of tax saving and index investing is not available in the mutual fund industry as of now.

This article was originally published on March 02, 2009.