Ahead of Budget 2019, the Association of Mutual Funds in India (AMFI) released a set of recommendations in a document named 'BUDGET PROPOSALS FOR FY 2019-20'. Some of its requests are listed below:
Association of Mutual Funds in India -
It is requested that suitable clarifications should be issued with regard to the treatment of the Units allotted consequent on segregation of portfolio of a mutual fund scheme in the hands of the unit holder for the capital gains tax purposes that -
A. The allotment of units in a segregated portfolio of a mutual fund scheme is not a Transfer under section 47 of the Income Tax Act.
B. The period of holding of such units shall be reckoned from the date of investment by the investor {with suitable explanation under Section 2 (42A)}.
C. The cost of acquisition in case of Main scheme and Segregated portfolio shall be the proportionate cost as determined on the date of segregation for the purposes of section 49.
Union Budget 2019 | Get the live news updates, views & analysis here
It is requested that suitable clarification may be issued that – switching of Units from Regular Plan to Direct Plan or vice-versa and Growth Option to Dividend Option or vice versa, within a scheme of a mutual fund shall not be regarded as transfer and hence, shall not be charged to capital gains, by inserting a new sub-section under Section 47 of the Income Tax Act, 1961.
Read the full document here:
