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HomeUncategorizedMF houses want tax sops for pension products on lines of NPS

MF houses want tax sops for pension products on lines of NPS

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Mutual fund houses have said that tax benefits for retirement solutions should be provided on the lines of the New Pension System (NPS) as they are planning to enter pension funds sector in a big way.

The Budget has made an additional tax break of Rs 50,000 into the NPS investment under section 80CC(D) of the Income Tax Act.

Currently, three MF houses, out of a total of 45, are having products in the pension segment and they are UTI MF, Franklin Templeton and the recently launched retirement product by Reliance Mutual Fund.

While Franklin is working on another retirement solution, Kotak Mutual Fund is also keen to come up with a retirement product, according to market sources.

Franklin currently has only one retirement fund – the Franklin India Pension Plan. Its asset under management (AUM) under its 15-year old retirement fund is around Rs 400 crore. The company is working on coming up with one more pension product in near future.

“Retirement solution is an extremely important segment as this is a significantly large asset class,” Franklin Templeton Investments India president Harshendu Bindal told PTI last night on the sidelines a Morningstar fund awards event.

“Tax benefits given to the existing retirement products are under the category of section 80C only. But the problem is that section 80C is a very limited category where you are buying several financial products. We have demanded the tax benefit on the lines of NPS, which was announced in the Budget,” he said.

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