Ahead of the Union Budget, industry body AMFI has asked the government to bring uniformity in taxation on listed debt securities and debt mutual fund (MFs) and bring parity in tax treatment between MFs and unit-linked insurance plans (ULIPs).
Both MFs and ULIPs invest in securities.
In its Budget recommendation for 2022-23 to the Finance Ministry, the industry body has requested that mutual funds should be allowed to introduce low-cost, lower-risk, tax-exemption-linked debt-linked savings schemes (DLSS) on the lines of equity-linked saving schemes (ELSS).
It has been further proposed that investment of up to ₹1.5 lakh underDLSS be eligible for tax benefit, subject to a lock-in period of 5 years (as in the case of tax-saving bank deposits). Currently, ELSS qualify for tax benefits under Section 80 CCC of the Income Tax Act for an investment limit of up to ₹1.5 lakh in a fiscal year.
