Budget expectations: Mr. Jimmy Patel, MD & CEO, Quantum Mutual Fund

Investors should be given full freedom to choose (or switch) their investments without any conditions applied as is applicable to ULIPS.

Jan 17, 2020 10:01 IST India Infoline News Service

Jimmy Patel
In the year 2019 retail investors continued to remain buoyant with their SIP investments in spite the market volatility and rupee devaluation. As far as my expectations are concerned I think the one thing I always wanted from the budget to do is to revise the definition of “Equity Oriented Funds” (EOF) by including Fund of Funds (FOF) schemes which invest predominantly i.e., 65% or more, in units of Equity Oriented Mutual Fund Schemes.

My wish list continues & my second point is a tax exemption on lines of NPS to investment in Retirement Benefit / Pension Schemes that may be allowed to be launched by Mutual Funds. In My third recommendation I request that Units issued by Mutual Funds that are registered with SEBI, having a lock-in for three years wherein the underlying investments are made into equity or debt of ‘infrastructure sub-sector’ as specified by RBI Master Circular in line with ‘Master List of Infrastructure sub-sectors’ notified by the Government of India, be also included in the list of the specified long-term assets and may be notified as “Long term specified assets” under Section 54EE. This will help for exemption on long-term capital gains.

Further in order to bring uniformity in taxation of investment in Mutual Funds schemes and ULIPs of Insurance companies, I would like to suggest that in case of Intra-Scheme Switches (switching of investment within the schemes of the fund house and intra-fund house) should ideally be exempt from payment of capital gains tax. Investors should be given full freedom to choose (or switch) their investments without any conditions applied as is applicable to ULIPS.

Moreover, capital gain tax should be also exempted on equity schemes in general. While equity mutual funds have the potential to help investors achieve their financial goals, taxes are dispiriting. Similarly, removal of STT has been long in our wish-list. Mutual fund investors are required to pay STT every time they invest and the mutual fund pays STT on the Investment Portfolio of the underlying scheme. We wish to abolish STT that is being charged at the time of redemption of equity mutual funds. 

Disclaimer, Statutory Details & Risk Factors:
The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

Mutual fund investments are subject to market risks read all scheme related documents carefully.

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