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AMFI Seeks Tax Overhaul for Mutual Funds
20 Jan
Summary
- AMFI proposes ELSS deduction under new tax regime.
- Restoration of indexation for debt funds is requested.
- Parity for FoFs, ReITs, and InvITs with equity funds sought.
The Association of Mutual Fund of India (AMFI) has presented a comprehensive 27-point proposal to the government for the Union Budget FY27. A primary focus is the request for tax reforms aimed at stimulating investment and market growth.
AMFI seeks the reintroduction of long-term capital gains tax with indexation for debt mutual funds held for over 36 months. This is considered crucial for conservative investors and for deepening the corporate bond market, which supports national economic development.
The proposal also advocates for a separate deduction for Equity Linked Savings Scheme (ELSS) investments under the new tax regime, preserving its role as an accessible equity investment vehicle for retail investors.
Furthermore, AMFI requests an amendment to the definition of 'Equity Oriented Funds' to include Fund of Funds that invest at least 90% in equity-oriented schemes. This aims to ensure equitable tax treatment for investments routed through these structures.
AMFI has also called for tax parity for mutual funds investing a minimum of 65% in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This measure is expected to boost investment in critical real estate and infrastructure sectors vital for the country's progress.
Additionally, AMFI has proposed extending EEE tax treatment to Mutual Fund Linked Retirement Schemes, similar to the National Pension System (NPS), to encourage retirement savings. They also seek the reinstatement of earlier STT rates on Futures and Options for mutual funds acting as investors.
