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Mutual Funds term Budget positive
February 28, 2003 20:51 IST
Indian mutual fund industry on Friday welcomed the Budget, saying it was "extremely positive" on dividends, equity and capital gains front and will help revive the capital market.
"It seems that not only are dividends on equity funds totally free of tax, but even dividends on all other types of Funds are tax free in the hands of the investor, though they will be subject to 12.5 per cent distribution tax", Prudential ICICI AMC managing director Shailendra Bhandari said.
Terming the budget as a "populist" one, he said that overall impact should be positive for both debt and equity markets over the next year.
KPMG India country manager Ian Gomes said re-introduction of exemption of dividends recieved by tax payers coupled with long-term capital gain exemption fpr equities will indeed help revival of the capital markets.
IL&FS AMC chief N K Sharma said budget will definitely lead to growth in demand by benefiting corporate sectors topline as well as bottomline growth.
"This will lead to equity markets doing well in the current year and help investors to earn decent returns on their investment in equities.
For mutual industry, it has retailed the competitive structure and will enable both the debt as well as equity side to grow.
Sanjay Sachdev, CEO & MD, IDBI-Principal AMC said, "The abolishment of dividend tax in the hands of shareholder, will act as a major fillip for capital Markets as it would create convenience for investment".
PTI