Amfi Seeks Restoration of LTCG Indexation for Debt Mutual Funds, Proposes New Tax Incentives

ରାଜନୀତି

ଟିଟିଲାଗଡ଼ ବ୍ୟବସାୟୀଙ୍କ ଉପରେ ଆକ୍ରମଣ ମାମଲା: ଅଭିମନ୍ୟୁ ସାହୁ ହତ୍ୟାକାଣ୍ଡର...

June 16, 2026

ପ୍ରଧାନମନ୍ତ୍ରୀ ମୋଦୀଙ୍କ ଫ୍ରାନ୍ସ-ସ୍ଲୋଭାକିଆ ଗସ୍ତ: ଜି-୭ ଶିଖର ସମ୍ମିଳନୀରେ ଯୋଗଦେଇ...

June 13, 2026

ପୂର୍ବତନ ଗୁଣୁପୁର ବିଧାୟକ ରାମମୂର୍ତ୍ତି ଗମାଙ୍ଗୋଙ୍କ ପରଲୋକ

June 12, 2026

ଭୁବନେଶ୍ୱରରେ ଉଦ୍ଘାଟିତ ହେଲା ନୂଆ ଏକାମ୍ର କାନନ-ଇନ୍‌ଫୋସିଟି ରାସ୍ତା; ଜୟଦେବ...

June 12, 2026

ମନୋରଞ୍ଜନ

ଆଜି ସଜବାଜ, କାଲି ପହିଲି ରଜ: ଉତ୍ସବମୁଖର ଓଡ଼ିଶାର ଗାଁଠୁ...

June 13, 2026

ଅଭିନୟ ଛାଡ଼ି ଦର୍ଜି କାମ ଶିଖିବାକୁ ଚାହାଁନ୍ତି ଅପାରଶକ୍ତି ଖୁରାନା,...

June 13, 2026

ଆଲିଆ ଭଟ୍ଟଙ୍କ ବିରୋଧରେ ‘ପେଡ୍ ନେଗେଟିଭ୍ ପିଆର୍’ ଅଭିଯୋଗ ମଧ୍ୟରେ...

June 12, 2026

‘ଏଲିଏନ୍‌ମାନେ ପୃଥିବୀକୁ ଆସିସାରିଛନ୍ତି’; ହଲିଉଡ୍ ନିର୍ଦ୍ଦେଶକ ଷ୍ଟିଭେନ୍ ସ୍ପିଲବର୍ଗଙ୍କ ଚମକପ୍ରଦ...

June 11, 2026

Amfi Seeks Restoration of LTCG Indexation for Debt Mutual Funds, Proposes New Tax Incentives

The Association of Mutual Funds in India (Amfi) has urged the government to restore long-term capital gains tax with indexation for debt mutual funds, withdrawn in 2023, citing a sharp fall in long-term investor participation. The industry body also proposed a new debt-linked savings scheme, tax parity for equity fund structures, ELSS reforms and pension products managed by mutual funds.

Published by Somesh | January 24, 2026

The Association of Mutual Funds in India (Amfi) has called on the government to restore long-term capital gains (LTCG) taxation with indexation benefits for debt mutual funds, arguing that the withdrawal of the benefit in 2023 has significantly reduced long-term investor participation and weakened inflows into fixed-income schemes.

Under the Finance Act, 2023, gains from most debt mutual funds are now taxed at the investor’s income-tax slab rate, irrespective of the holding period, under Section 50AA of the Income-tax Act, 1961. Amfi said this change has made debt funds less attractive compared to other long-term savings options, particularly for retirees and conservative investors seeking stable returns.

To revive interest, Amfi has proposed that gains on debt mutual funds held for more than three years be taxed at either 12.5 per cent or 20 per cent with indexation benefits. The move, it said, would encourage long-term savings, support senior citizens dependent on fixed-income products, and strengthen the corporate bond market by providing a steady source of long-horizon capital.

The industry body has also recommended the introduction of a Debt-Linked Savings Scheme (DLSS) with a five-year lock-in period and a dedicated tax deduction outside the overcrowded Section 80C framework. The proposed scheme would invest predominantly in high-quality debt instruments and offer tax benefits under both the old and new tax regimes, helping mobilise long-term funds for corporate and infrastructure financing.

On the equity side, Amfi has sought tax parity across mutual fund structures. It has urged the government to amend the definition of equity-oriented funds to include fund-of-funds (FoFs) that invest primarily in equity mutual funds, noting that such schemes currently face non-equity taxation despite indirect exposure to domestic equities.

Amfi has also proposed reforms to equity-linked savings schemes (ELSS), including removing outdated requirements such as mandatory investments in multiples of ₹500. It has further called for a separate tax deduction for ELSS under the new personal tax regime, warning that the lack of incentives is weakening ELSS’s role as a low-cost entry point for first-time equity investors.

In the retirement space, Amfi has suggested allowing all mutual funds to launch pension-oriented schemes with tax treatment similar to the National Pension System (NPS), including deductions for employee and employer contributions and an exempt-exempt-exempt tax structure. It has also proposed a voluntary retirement account modelled on the US 401(k), managed by mutual funds, to expand pension coverage and channel long-term household savings into capital markets.

Additionally, Amfi has sought tax exemption for intra-scheme switches to remove friction in portfolio rebalancing and improve investor flexibility.