Govt may twist Budget 2015 proposal on debt MFs

India Infoline News Service | Mumbai |

The tax department is also considering to exempt past investments in MFs whose redemptions would be made by March 2015.

The Budget 2014-15 aimed to lay down a roadmap for economic recovery and attempted to set in order the accounts, both in terms of deficit and quality of spending.
The actual implementation on the ground will propel the economy and the market to a new orbit.
However, a major drawback from a capital market viewpoint was the increase in rate of long term capital gains (LTCG) in debt mutual funds to 20% and the period for LTCG raised to 3 years instead of 1 year
The Ministry of Finance is now planning to twist the budget proposal for increasing capital gains to 20% for debt mutual fund investors, according to a media report.

The mutual fund industry has been arguing that those persons who had invested money in debt-oriented MFs prior to the announcement of Budget proposals should not be subjected to higher incidence of tax.
Finance Ministry could extend lower tax rate of 10 per cent to those investors who had redeemed their holding on or before July 10, the media report added.
The tax department is also considering to exempt past investments in MFs whose redemptions would be made by March 2015.

 

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