"Some of the proposals are also aimed at bringing parity with comparable investment avenues, making mutual funds more retail investor friendly," said NS Venkatesh, Chief Executive Officer of AMFI.
With the Union Budget just around the corner, the Association of Mutual Funds in India (AMFI) has put forth a wishlist on behalf of the mutual fund industry to the Finance Ministry.
"AMFI's suggestions have been in the Budget proposal list for a few years. We are hoping this time our long pending submissions get addressed, which would help take the Indian MF industry, not only to the next level of growth, but also help in contributing to making economy stronger, especially with deepening of bond market, making long term availability of funds for infrastructure growth, and reducing the fiscal deficit by shifting investments from Pure Gold to Gold ETFs," said NS Venkatesh, Chief Executive Officer of AMFI.
Some of the proposals are also aimed at bringing parity with comparable investment avenues, making mutual funds more retail investor friendly, he added.
Below are the proposals sent to the Finance Ministry:
*Mutual Funds be allowed to introduce low-cost, lower-risk Tax exemption-linked Debt Linked Savings Schemes (DLSS) to contribute in deepening Indian Bond Market.
*ULIPs and Equity MFs be brought on par on Tax Treatment, a) Remove LTCG Tax, b) Abolish STT on Equity Funds at time of redemption, c) abolish DDT on Dividends paid by Equity-oriented Funds, and d) Switches within MF Schemes be exempted from Capital Gains Tax.
*Mutual Funds be recognised as ''Specified Long Term Assets'', and be exempted from LTCG under section 54 EC of IT Act 1961.
*Lower the holding period in Gold and Commodity ETFs for LTCG to one year from three years, as in the case of listed debt securities.
*Seeks removal of tax arbitrage between ULIPs and Equity schemes on account of Dividend Distribution Tax (DDT).
*Seeks reduction in DDT on Debt schemes to bring parity in DDT rate in line with corporate tax rate of 22 percent.
*AMFI has requested clarity in respect of creation of segregated portfolio in mutual fund schemes, on the capital gains tax treatment upon the sale of Units with regard to the treatment of the Units allotted consequent on segregation of portfolio
*EPFO, NPS, Insurance Companies, non-profit Section 8 companies who invest on behalf of their investors / contributors/ policyholders in Mutual Funds schemes or Infrastructure Debt Funds of Mutual Funds, be exempted from Dividend Distribution Tax under section 115R of the Income Tax Act.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.