Budget 2023: Mutual fund industry wishlist

Mutual fund industry body, AMFI (Association of Mutual Funds of India), has released a wishlist of what the industry wants from Budget 2023.

1) Uniform tax implications for MFs & ULIPs: Currently equity mutual funds are subject to 10% capital gains tax. However, ULIPs are tax free under certain conditions (if sum assured is >10 times premium, 5-year lock-in, premium < Rs 2.5 lakh)

2) Tax parity with listed bonds: Currently, 10% tax is levied for gains on listed debentures if held for over 12 months, but for debt mutual funds, 20% is levied if held for more than 36 months.

3) Clarity on scheme mergers: There are different tax implications for mutual fund schemes which have been merged versus consolidation of options under one scheme.

4) Increase in threshold limit for TDS: In case of dividend payouts, threshold limit of tax deducted at source is currently Rs 5000. AMFI wants this limit increased to Rs 50,000.