Context:
Association of Mutual Funds in India (AMFI) has proposed tax reliefs for debt schemes and rollback in the provision regarding the hike in equity taxation during the Budget 2025.
Key Highlights:
- In April 2023, the government had scrapped the indexation benefit for debt MF schemes, making profits taxed at slab rates for the investors.
- It asks that debt fund taxation should be on par with that of listed bonds, with capital gains on redemption of units of debt-oriented mutual funds held for more than 1 year being taxed at 12.5%.
- Capital gains are profits made from selling an asset like a bond, stock, or real estate.
- Listed bond is a debt security that is traded on a recognized stock exchange, such as the National Stock Exchange (NSE)
- It asks that debt fund taxation should be on par with that of listed bonds, with capital gains on redemption of units of debt-oriented mutual funds held for more than 1 year being taxed at 12.5%.
- The industry also wants the cut in STT, which has resurfaced in the prior Budget.
- The Securities Transaction Tax (STT) is a direct tax on the buying and selling of securities like stocks, mutual funds, and derivatives on recognised stock exchanges in India.
- AMFI proposes a revision in the taxation of all fund of funds (FoFs).
- Fund of Funds (FoF) is an investment vehicle that pools capital from investors to invest in a diversified portfolio of other mutual funds.
The Association of Mutual Funds in India (AMFI)
The Association of Mutual Funds in India (AMFI) is a non-profit organization that represents all the Asset Management Companies (AMCs) of mutual funds registered with the Securities and Exchange Board of India (SEBI).
- Established
- August 22, 1995
- CEO
- Chalasani Venkat Nageswar
