Budget 2017 : India could see its own 401K

Association of Mutual Funds India (AMFI) proposed an idea of introducing mutual fund inked retirement plan which will be similar to the well known 401K pension scheme in the US.

This will be a good opportunity for the salaried, working population of India who can make use of their pension funds managed by professional mutual fund managers to earn healthier returns, along with tax benefits.

AMFI has also proposed before the Finance Ministry to include debt-linked savings scheme under the tax savings territory of Sec 80C of Income Tax Act. This could bring a big change in the existing Income Tax Act. As of now, only equity-linked savings schemes (ELSS) are qualified to get tax benefit under Section 80C of Income Tax Act for an investment limit of 1.50 lakhs every year.

The association has also asked to extend the tax benefits available under Rajiv Gandhi Equity Savings Scheme (RGESS) along with extending benefits under Sec 54EC for MF schemes with lockin period of 3-5 years.