RETHINK TAX ON DEBT-ORIENTED MUTUAL FUNDS: AMFI
Why in the news?
- The Association of Mutual Funds in India (AMFI) has urged the Finance Ministry to reconsider the short-term capital gains tax introduced last year on debt-oriented mutual funds with equity exposure up to 35%.
Proposed Amendments
- AMFI suggests aligning Section 50AA tax treatment for debt-oriented mutual funds with government securities.
- Government securities’ gains over three years taxed at 10%, listed debentures’ period cut to 12 months
Source: Slideshare
About Mutual Funds:
- Investment Vehicle: Mutual funds pool investor funds to invest in equities, bonds, government securities, gold, and more.
- Asset Management Companies (AMCs): Qualified companies create AMCs to manage investments, market mutual funds, and facilitate transactions.
- Professional Management: Fund managers, experts in investment analysis, manage the pooled funds according to the fund’s objectives.
- Expense Ratio: AMCs charge an expense ratio for fund management, which varies by mutual fund and is regulated by SEBI.
Debt Mutual Funds/ Debt Oriented Mutual Funds
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