Mutual funds expect very little from budget 2018
, ET Online|
Jan 16, 2018, 11.26 AM IST
Mutual funds did not get many goodies from the finance minister Arun Jaitley's budgets in the last three years. Apart from a nasty blow of increasing the holding period of debt funds to three years from one year to qualify the long-term capital gains tax, the finance minister has ignored the industry during the last three years.
However, that is not why the mutual fund industry is expecting precious little from the budget 2018. Most mutual fund honchos say the government's priorities are different this time, and it may not have time to devote to the industry.
"We guess the government is going to focus on reviving consumption. There may be some tax concessions, etc. to revive growth. It may also focus on rural and agriculture to revive growth. In this scenario, we don't think the government will have mutual fund industry in its radar," said a CEO of a large private sector mutual fund.
Mutual fund industry has been hopeful of a few goodies in this budget as they believe that they have been overlooked in the last few budgets. In the initial days, mutual fund participants were hopeful of a few new products and a few tax concessions. However, many mutual fund officials and intermediaries believe that save for a few small sops, the industry is unlikely to get much.
As reported by ET.com Mutual Funds, the industry is hopeful of two new products: a fixed income product that will qualify for tax deductions like an Equity Linked Savings Scheme (ELSS) under Section 80C of the Income Tax Act, and a long-term product that will help the industry to cater to the growing demand for retirement products.
Read: A debt mutual scheme under Section 80C likely in Budget 2018
Read: Will mutual funds get a pension plan in Budget 2018
If the government goes for tax sops as expected, the mutual funds would also have something. Many participants believe that the finance minister may enhance the Section 80C benefit from the current Rs 1.5 lakh limit. Currently, tax payers can invest in a prescribed list of instruments and save taxes of up to Rs 1.5 lakh.
The mutual fund industry has been hoping that the government may enhance the Section 80C limit as many individuals exhaust it with their provident fund contributions, life insurance premium, and home loan principal repayment. Section 80C covers a myriad of options ranging from Employees Provident Fund to tuition fees.
However, that is not why the mutual fund industry is expecting precious little from the budget 2018. Most mutual fund honchos say the government's priorities are different this time, and it may not have time to devote to the industry.
"We guess the government is going to focus on reviving consumption. There may be some tax concessions, etc. to revive growth. It may also focus on rural and agriculture to revive growth. In this scenario, we don't think the government will have mutual fund industry in its radar," said a CEO of a large private sector mutual fund.
Mutual fund industry has been hopeful of a few goodies in this budget as they believe that they have been overlooked in the last few budgets. In the initial days, mutual fund participants were hopeful of a few new products and a few tax concessions. However, many mutual fund officials and intermediaries believe that save for a few small sops, the industry is unlikely to get much.
As reported by ET.com Mutual Funds, the industry is hopeful of two new products: a fixed income product that will qualify for tax deductions like an Equity Linked Savings Scheme (ELSS) under Section 80C of the Income Tax Act, and a long-term product that will help the industry to cater to the growing demand for retirement products.
Read: A debt mutual scheme under Section 80C likely in Budget 2018
Read: Will mutual funds get a pension plan in Budget 2018
If the government goes for tax sops as expected, the mutual funds would also have something. Many participants believe that the finance minister may enhance the Section 80C benefit from the current Rs 1.5 lakh limit. Currently, tax payers can invest in a prescribed list of instruments and save taxes of up to Rs 1.5 lakh.
The mutual fund industry has been hoping that the government may enhance the Section 80C limit as many individuals exhaust it with their provident fund contributions, life insurance premium, and home loan principal repayment. Section 80C covers a myriad of options ranging from Employees Provident Fund to tuition fees.
