|Chennai||Rs. 23980.00 (0.04%)|
|Mumbai||Rs. 24810.00 (-0.72%)|
|Delhi||Rs. 24450.00 (0%)|
|Kolkata||Rs. 24600.00 (0%)|
|Kerala||Rs. 23950.00 (0%)|
|Bangalore||Rs. 24100.00 (-0.41%)|
|Hyderabad||Rs. 23980.00 (-0.25%)|
India’s mutual fund sector, which saw an action-packed year in 2012, expects the government to continue with its reform measures for the sector. In Budget 2013-14, fund houses want the government to address the issue of double incidence of securities transaction tax (STT). They also want it to allow state-owned companies to invest in private sector mutual funds. Also, mutual fund pension schemes should be allowed under the New Pension Scheme, the fund houses said.
Nimesh Shah, chief executive and managing director of ICICI Prudential Mutual Fund, said the current STT levy required a unit holder to pay the tax on every transaction. “This leads to double incidence of STT on investors and, therefore, should be withdrawn,” he said.
Jimmy Patel, chief executive of Quantum MF, agreed. STT was charged on all transactions in the stock market —when a fund bought or sold securities and when an investor bought or sold units from the fund house, he said.
|WHAT MUTUAL FUNDS SEEK FROM THE BUDGET|
Another concern of private fund houses is they cannot tap the surplus funds of state-owned companies. Waqar Naqvi, chief executive of Taurus Mutual Fund, said the industry would like to see public sector undertakings being allowed to invest in private mutual funds.
Two years ago, the government had allowed foreign investors to invest in Indian mutual fund houses. However, this is yet to become popular. Because of the procedural and practical hurdles involved, domestic fund houses haven’t seen foreign inflows. Executives in the sector said a push was required to help mutual funds mobilise money from abroad.
On mergers of schemes, fund houses have voiced concern over the tax incentives to investors. Currently, when a scheme is merged into another, the first scheme ceases to exist. Though investors choose to remain invested, it is considered a withdrawal from one scheme to another and investors are charged capital gains tax.
Industry executives also sought no income tax be levied on investment in pass-through certificates by mutual funds.