Outlook Money
In budget 2024, the Association of Mutual Funds of India (AMFI), has proposed relaxation in taxation of Debt-oriented mutual funds, revisions of the definition of fund-of-funds schemes, and permission to launch tax-friendly pension-oriented mutual fund schemes to the government.
In the proposal, amfi proposed that the capital gains on redemption of units of Debt-oriented mutual funds which were held for over 3 years should be taxed at the rate of 10 per cent without indexation.
AMFI has proposed that fund-of-funds schemes which invest a minimum of 90 per cent in units of Equity Oriented Mutual Fund Schemes, which in turn invest a minimum of 65 per cent in listed domestic equity shares should be classified as EOFs and tax should be as that of capital gains tax.
AMFI also recommends the launch of pension-oriented schemes namely, ‘The Mutual Fund Linked Retirement Scheme’ (MFLRS)' by allowing SEBI-registered mutual funds. It demands the same tax benefits as that of the National Pension Scheme.
AMFI proposed that with a 3-year lock period, the mutual fund units invested in specified infrastructure subsectors should qualify for tax exemption on Long-Term Capital Gains under Sec. 54EC.
AMFI also proposed the aligning of tax treatment of Gold ETFs with physical gold to encourage investments in Gold ETFs.
AMFI also suggested prescribing a uniform rate for deduction of surcharge on Tax Deducted at Source (TDS) in respect of dividends from mutual fund units to Non-Resident Indians (NRIs).
Compiled by Syed Muskan