Published on 14/01/2020 4:06:08 PM | Source: Quantum Mutual Fund

Views On Budget 2020  Expectations - Jimmy Patel

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Below is the Views On Budget 2020  Expectations by Jimmy Patel – MD & CEO, Quantum AMC for Mutual Fund Industry


In the year 2019 retail investors continued to remain buoyant with their SIP investments in spite the market volatility and rupee devaluation. As far as my expectations are concerned I think the one thing I always wanted from the budget to do is to revise the definition of “Equity Oriented Funds” (EOF) by including Fund of Funds (FOF) schemes which invest predominantly i.e., 65% or more, in units of Equity Oriented Mutual Fund Schemes. My wish list continues & my second point is a tax exemption on lines of NPS to investment in Retirement Benefit / Pension Schemes that may be allowed to be launched by Mutual Funds. In My third recommendation I request that Units issued by Mutual Funds that are registered with SEBI, having a lock-in for three years wherein the underlying investments are made into equity or debt of ‘infrastructure sub-sector’ as specified by RBI Master Circular in line with ‘Master List of Infrastructure sub-sectors’ notified by the Government of India, be also included in the list of the specified long-term assets and may be notified as “Long term specified assets” under Section 54EE.

This will help for exemption on long-term capital gains. Further in order to bring uniformity in taxation of investment in Mutual Funds schemes and ULIPs of Insurance companies, I would like to suggest that in case of Intra-Scheme Switches (switching of investment within the schemes of the fund house and intra-fund house) should ideally be exempt from payment of capital gains tax. Investors should be given full freedom to choose (or switch) their investments without any conditions applied as is applicable to ULIPS. Moreover capital gain tax should be also exempted on equity schemes in general. While equity mutual funds have the potential to help investors achieve their financial goals, taxes are dispiriting. Similarly removal of STT has been long in our wish-list. Mutual fund investors are required to pay STT every time they invest and the mutual fund pays STT on the Investment Portfolio of the underlying scheme. We wish to abolish STT that is being charged at the time of redemption of equity mutual funds. 


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