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Union Budget 2016-17: AMFI seeks more tax breaks for mutual fund sector

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

twitter-logo PTI   New Delhi     Last Updated: February 6, 2016  | 16:50 IST
AMFI seeks more tax breaks for mutual fund sector
The industry body has sought more tax incentives on ELSS, pension products and infrastructure debt mutual funds.

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 CVR 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 in Kolkata.

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 AUMs of the industry. Clarity on REITs is awaited and a notification on target date debt funds is due from markets regulator Sebi.

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