Market players wave an unmet wishlist

The disparity between close-ended funds and open-ended funds with regard to the dividend distribution tax has been resolved and both will now be treated equally.

However, Association of Mutual Funds in India chairman A P Kurien is not too pleased. “There were some minor things we had asked for, but haven’t got. For instance, we have been pointing out the incidence of double taxation of Securities Transaction Tax — when a fund buys securities, it pays Securities Transaction Tax, investors redeeming units also have to pay an Securities Transaction Tax,” Kurien says.

The bigger goal of spreading the equity cult in the country has been ignored. “This Budget by itself, will not boost the investor base in the country. In fact, with the hike in

Securities Transaction Tax, fund investors would have to pay more tax twice over,” Kurien laments.

At 0.25 per cent, the Securities Transaction Tax on mutual funds is the highest across all categories.

Surely, that wouldn’t tempt new retail investors into mutual funds and goad them towards more risky direct equity punting.