Budget 2025, Mutual Fund Experts Expectations: The Modi government is fully prepared to present the budget for FY 2025-26. The mutual fund industry of Rs 68 lakh crore has raised high expectations from the budget. Recently, the Association of Mutual Funds in India (AMFI) has also submitted a 15 -point proposal to the government with the aim of promoting the mutual fund industry and increasing investors’ participation. Industry experts believe that the government can take steps like changing the definition of equity mutual funds to reinstate the indexation benefit in date mutual funds, long -term capital gains (LTCG) tax reduction and FOF requirement.
1. The indexation benefit in date mutual funds should be restored again
BPN Fincap Director AK Corporation has demanded Finance Minister Nirmala Sitharaman to reinstate the indexation benefit in date mutual funds.
Earlier, under this provision, investors were allowed to adjust their capital gains according to the influence of inflation, which would make it possible to assess the real return. However, this provision was removed in the July 2024 budget, causing damage to prolonged investors in the date mutual funds. If this indexation is re -enforced, it will not only give better returns to investors, but will also promote a stable and favorable investment environment.
2. Reduction in Long Term Capital Gain Tax (LTCG) on Equity
Manish Bhandari, CEO and portfolio manager of Walm Capital Advisors, said that reduced LTCG tax on equity from 12.5% to 10% will save investors by 2.5% additional capital, which they can again invest in mutual funds. This will help in increasing the liquidity of the additional capital market and promote access.
3. Changes in the definition of equity mutual funds according to the need of FOF
What does it mean: Currently, at least 65% corpus must be invested in equity securities to classify a mutual fund as equity-oriented mutual funds. Some funds of funds, which invest in other mutual funds, face difficulty in fulfilling this criteria.
Expected industry: The corporation says that companies associated with the region are demanding to redefine this limit at 90%. This means that if 90% of the FOF is eventually invested in equity funds, it should be classified as equity-oriented funds and will also get tax benefits.
4. Tax exemption should be given on date linked savings scheme like ELSS
CEO and CFA Mohit Gang of Moneyfront said that the mutual fund industry hopes that the government currently increase the LTCG exemption limit of Rs 1.25 lakh. Also, the TDS limit on dividend should be increased from the current Rs 5,000 to at least Rs 50,000 per financial year.
Additionally, the mutual fund industry is demanding to simplify the taxation process on products such as Reit/Invit, so that it can be more favorable for retail investors. The industry has been demanding for a long time to include DLSS (Date Linked Savings Scheme) in the eligibility of tax exemption under 80C like ELSS.
5. Demand to introduce Mutual Fund Linked Retirement Scheme (MFLRS)
The corporation says that at present, the benefit of tax benefit and additional deduction under Section 80C in the National Pension Scheme (NPS) provides Section 80CCD (1B). But mutual funds do not have any such dedicated retirement tax-sending option.
Expectation of the industry: The mutual fund industry proposes a mutual fund linked retirement scheme (like NPS), where investors can get tax exemption benefit if they contribute to retirement-centric mutual funds.
6. Demand for inclusion of mutual funds in infrastructure investments and tax exemption
What does it mean: Infrastructure investment (such as bonds) is often given the benefit of tax exemption or deduction to promote important infrastructure growth.
Expected industry: The mutual fund industry wants the investment (through special funds) to be taxed by the mutual funds in infrastructure projects, which can promote long -term investment in infrastructure development.
When will the budget be presented
Finance Minister Nirmala Sitharaman will present the budget on Saturday 1 February 2025. This will be their 8th consecutive budget. The budget is a very important financial document for the Government of India. It gives complete information about the country’s estimated income and expenses for the next financial year.
The budget plays an important role in giving direction to the country’s economy. It affects different sectors and determines policies that have a direct impact on citizens, business and industries.