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Mutual Funds in Union Budget 2014

 

Mutual Funds in Union Budget 2014 

 

The Union Budget is a mixed bag for the mutual fund industry.

The Union Budget 2014 had no major surprises for the mutual fund industry. The only good news from the Finance Minister Arun Jaitley's speech was the hike in investment limit in section 80 C of the Income Tax Act from Rs. 1 lakh to Rs. 1.50 lakh.

Here's a lowdown on how the proposed measures in the budget would impact the mutual fund industry.

What's good?

1) 80 C investment limit hiked to from Rs. 1 lakh to Rs. 1.50 lakh.

Impact: This can boost investments in ELSS category

2) Uniform KYC for investing in all financial instruments and single operating demat account will be introduced, which will allow transactions of all financial assets.

Impact: This will do away with the requirement to perform multiple KYC for investing in products regulated by different regulators. This will help investors and intermediaries to seamlessly transact across all financial instruments. 

What's bad?

1) 80 C investment limit hiked to from Rs. 1 lakh to Rs. 1.50 lakh.

Impact: Other investment avenues like PPF, insurance schemes, fixed deposits are eligible for tax exemption under Income Tax Act 80 C. This can increase investments in such instruments at the cost of mutual funds.

2) Long term capital gains tax on debt funds has been increased from 10 % to 20. Long term for debt funds would be 36 months, instead of 12 months. 

Impact: This can make debt funds less attractive as the tax rate has been hiked.

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Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

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