Investors now have optimism thanks to AMFI’s desire to hold back investor benefits through the Union Budget for 2024.
Following the Union Budget, the Association of Mutual Funds in India (AMFI) has produced a paper containing a number of important demands and feedback points.
These are the principal points of interest:
Implementing Changes to the Capital Gains Tax Retroactively Regarding the elimination of the debt mutual fund indexation advantage and the retroactive application of higher tax rates, AMFI suggests giving the indexing benefit another look or extending it through July 23, 2024. The rationale for this is that applying the higher tax rates retroactively might undermine investor confidence, discourage new investors, and have a detrimental effect on those who made investments based on the prior tax rate.
Modification of Income Tax Act Section 50AA:
From the revision announced in the budget for funds investing more than 65 percent in units of funds with over 65 percent in debt/money market instruments, AMFI suggests revising the definition of specified mutual funds to include funds investing more than 90 percent in units of funds with over 65 percent in debt/money market instruments. This is justified by the fact that it would avoid investors from suffering negative tax consequences and bring the definition into line with the actual investment strategies of these funds.
Modification of Income Tax Act Section 50AA: From the revision announced in the budget for funds investing more than 65 percent in units of funds with over 65 percent in debt/money market instruments, AMFI suggests revising the definition of specified mutual funds to include funds investing more than 90 percent in units of funds with over 65 percent in debt/money market instruments. This is justified by the fact that it would avoid investors from suffering negative tax consequences and bring the definition into line with the actual investment strategies of these funds.
Restoration of Previous Capital Gains Tax Schedules:
The AMFI proposes bringing back to 15 percent the short-term capital gains tax and lowering the long-term capital gains tax to 10 percent.
