AMFI seeks more tax breaks for mutual fund sector

Association of Mutual Funds in India (AMFI) in its pre-budget proposals has urged the government to consider additional tax benefits for the investors.

The industry body has sought more tax incentives on ELSS, pension products and infrastructure debt mutual funds.

"We have asked for an equal treatment of pension products of mutual funds and NPS. At the moment, under section 80CCD of the Income Tax Act, NPS is given a priority. We have also sought separate tax exemption for ELSS, which is currently within the 80C limit of Rs 1.5 lakh," AMFI Chief Executive C V R Rajendran said.

"There is also need for more infrastructure financing. So we also proposed investment of capital gains in infrastructure mutual funds. The 54EC bonds (used to save capital gains) should be exclusively invested in infrastructure mutual funds," he said this on the sidelines of an Indian Chamber of Commerce summit here.

Rajendran further said there is a target to increase the size of the mutual fund industry to Rs 30 lakh crore within three years from the current Rs 13 lakh crore.

"But this would require all mutual fund companies to expand their reach. Narrow margins have prevented a rapid expansion. That is what keeping us from moving into smaller markets," he noted.

Bajaj Capital Director and Group CEO Anil Chopra said new products will help increasing AUM of the industry. Clarity on REITs is awaited and a notification on target date debt funds is due from markets regulator Sebi.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel