The mutual fund industry welcomed the budget proposal to increase the tax exemption limit under section 80C of the Income Tax Act to Rs 1.5 lakh, but said other measures were a mixed bag.
“The additional exemption under 80C will provide a limited window for tax exemption eligible mutual fund schemes,” LIC Nomura Mutual Fund’s Anutosh Bose said.
However, for the MF sector, the change in long-term capital gains will impact negatively and the support available to bring in first-time investors towards equity/debt investments will get severely compromised when compared to bank deposits, he warned.
“The increase in the 80C limit enhances tax incentive for potential retail investors to invest into equities mutual fund,” Kotak Mutual Fund’s Sandesh Kirkire said.
“This is a budget that focuses on speed, scale and skill.
Speed in pushing for quick and time bound decisions, and scale in the emphasis on improvement and more importantly expansion of infrastructure across a wider geography,” HSBC Global Asset Management India’s Puneet Chaddha said.
“Plan to reduce the fiscal deficit gradually to 3% is good for economic health. The focus of the Budget has been on increasing manufacturing activity, agri growth and controlling inflation through investment in storage,” Quantum AMC’s Atul Kumar said.
“We expect the revenue growth to be more back ended mirroring the GDP growth. Tilt in the budget is towards investment-led growth which augurs well for sustained economic recovery,” Baroda Pioneer AMC’s Sanjay Chawla said.
“The increase in disposable income and the incentive for savings is a positive,” IDBI Capital’s D C Jain said.
Axis MF’s Chandresh Nigam said domestic savings too got encouragement through expansion of small savings schemes and tax benefits.