The mutual fund industry is poised to take advantage of the ₹50,000 crore tax incentives provided by the government in the Budget, with a focus on promoting systematic investment plans (SIPs) and showcasing the India growth story to attract investors.
The Budget announced a tax exemption on salary income of up to ₹12.75 lakh per annum through a rebate and standard deduction of ₹75,000. Sundeep Sikka, ED and CEO of Nippon India Mutual Fund, emphasized the importance of SIPs as a convenient tool for small savers over the long term, noting that potential tax savings can be utilized through this investment route.
In addition to increasing investor interest, the mutual fund industry is also expecting the entry of six new fund houses in the market. Angel One and Unifi Capital have already filed papers with SEBI to launch new products, while Jio BlackRock, Capitalmind, Choice International, and Cosmea Financial Holdings are also gearing up to enter the space.
Akhil Chaturvedi, ED & CBO of Motilal Oswal Asset Management Company, highlighted the importance of expanding SIP share and offering unique alternative investment products. Despite market volatility, mutual fund investments continue to gain momentum as investors seek long-term gains.
SEBI recently announced new norms to reduce the minimum SIP limit to ₹250 per month, aiming to bring financial investments to smaller towns. The regulator is also considering allowing mutual funds to offer insurance cover for SIP investors. SIP investments have seen significant growth, quadrupling to ₹2.10 lakh crore for FY25 from 2016-2017, according to AMFI data.
Aashish Somaiyaa, CEO of WhiteOak Capital AMC, emphasized the trust investors and MF distributors have in the industry, with the ‘Mutual Fund Sahi Hai’ slogan becoming a household saying. He pointed out the relative safety and outperformance of mutual funds against benchmark indices, especially during market volatility.
Overall, the mutual fund industry is poised to leverage the tax incentives provided in the Budget to attract more investors, promote SIPs, and capitalize on the growth opportunities presented by the Indian market.
