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Budget 2023: MFs seek LTCG exemption for longer-term equity investments

Industry says exemption for those staying invested for over three years will help channelise flows into financial assets

MFs, LTCG
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The mutual fund industry has also called for parity in taxation of equity funds and fund of funds (FoFs) investing in such schemes (Illustration: Binay Sinha)

Abhishek Kumar Mumbai
The mutual fund industry has sought a tax exemption for equity investors in the upcoming Budget to "encourage long-term investment". 

"It is requested that listed equity shares or units of equity-oriented fund schemes be exempted from [long-term] capital gains tax (LTCG) if the equity shares or mutual funds units are held for at least three years," the industry stated in its wishlist for Budget 2023.

Justifying the proposal, industry lobby the Association of Mutual Funds in India (Amfi) said the 10 per cent LTCG tax on equity schemes is at times higher than the effective tax on debt investments post

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