Budget 2022: MF industry shares list of demands from government – full details

As the countdown for the Union Budget 2022 has begun, the wishlist from the industries has started to come for the government. The Mutual Fund industry is also having its own bucket list. This is what Mutual Funds expect from the government: 

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List of demands: 

- Parity in taxes between listed debt securities and debt mutual funds      

- Exemption in Long Term Capital Gains (LTCG) after 3 years while after 1 year in listed debt 

- Tax parity in the sale of MFs and ULIPS 

- 10 per cent LTCG above Rs 1 lakh while no tax on ULIPS 

- Parity in tax payment with respect to intra scheme switching between MF and ULIPs 

- No tax on switching in the same ULIP scheme 

- Dividend option from growth option, mandatory tax payment from regular to direct  

- TDS limit on income distribution dividend at Rs 50,000  

- Currently it is limited to Rs 5000 while it has been increased to Rs 40000 or FD 

- The requirement of investment in multiples of Rs 500 must be done away with 

- Surcharge on MFs or non-corporate investors must be reduced 

- Surcharge on share dividend income at 15 per cent while 25 per cent or 37 per cent on MFs.  

- Surcharge on TDS must be identical for NRIs 

- TDS rate must be reduced from the current 30 per cent to 15 per cent on debt schemes for NRIs. 

- NRIs must also get benefits of indexation on investment in Mutual Funds  

- MFs must also be allowed to launch pension products like the NPS   

- The tax exemption on Gold and Silver ETFs should be reduced from 3 years to 1 year 

- Demand for reducing tax exemption period on debt ETF to 1 year  

- Stamp duty on equity MF must be just once and not be recurring 

- STT on squaring off ETFs should be lower than delivery deals  

- Demand for allowing MFs to manage funds of insurance companies 

- CPSEs should be allowed to invest their surplus funds in MFs 

- Currently, CPSEs are allowed to invest their surplus funds in MFs of PSUs.