MF firms seek parity with Ulip

Kolkata, Feb. 13: The mutual fund ( MF) industry has sought level playing field vis- a- vis the unit linked insurance plans ( ULIP) after the imposition of the dividend distribution tax ( DDT) and long- term capital gains tax ( LTCG) in the Budget, a top official of the industry body AMFI said.

Association of Mutual Funds in India ( AMFI) has already sent representations to the finance ministry and capital market regulator Sebi in the regard, the official said.

“Earlier, the mutual funds were subject to securities transaction tax ( STT) only. Now, this budget has imposed DDT and LTCG on mutual funds. It would have been better if LTCG was not there,” AMFI chief executive N. S. Venkatesh said.

Briefing reporters on the sidelines of an Indian Chamber of Commerce seminar here on Tuesday, he said AMFI has asked for a level playing field vis- a- vis the ULIPs as these were almost similar instruments like MFs and there were no such taxes on them.

He hoped something will be done when the Finance Bill gets passed.

Mr Venkatesh said that there had not been any impact on the tax imposition on the MF industry so far and the flow to the assets under management ( AUM) were normal like before.

WITH BUDGET imposing LTCG tax and DDT on mutual funds, the MF industry has sought level playing field with Ulips. ULIPS, THE equitybased products offered by insurance companies, do not any such taxes as MFs do.