Archive · 21 Jan 2026
Investors Seek Tax Relief in Budget 2026
The Association of Mutual Funds in India (Amfi) has asked the government to make some changes in the Budget to help mutual funds.
They want to bring back a benefit called indexation for debt funds held for more than three years.
This benefit helps people save on taxes when they sell these funds after a long time.
Amfi also wants the government to increase the amount of money that can be earned from selling equity funds without paying taxes.
Currently, this limit is Rs 1.25 lakh, and they want it to be Rs 2 lakh.
They also want to make it easier for people to invest in equity-linked savings schemes (ELSS) by allowing any amount of investment, not just multiples of Rs 500.
Additionally, they want to raise the threshold for tax deducted at source (TDS) on mutual fund income from Rs 10,000 to Rs 50,000.
These changes are aimed at encouraging people to save for the long term and to make investing in mutual funds easier.
Market experts also expect the budget to be neutral but supportive of growth, with a focus on sectors like telecom, internet, IT, consumer, cement, and chemicals.
The defence budget is expected to increase by 8% year-over-year, focusing on modernization and indigenization.
Amfi has submitted 27 recommendations to the government for tax relief in the Budget.
They seek restoration of indexation for debt funds held for more than 36 months.
Amfi proposes increasing the LTCG exemption limit for equity funds to Rs 2 lakh from the current Rs 1.25 lakh.
They suggest allowing any amount of investment in ELSS, subject to a minimum of Rs 500.
Amfi wants to raise the TDS threshold on mutual fund income from Rs 10,000 to Rs 50,000.
Market experts expect the budget to be neutral but supportive of growth, with a focus on sectors like telecom, internet, IT, consumer, cement, and chemicals.
- Who
- Association of Mutual Funds in India (Amfi) and market experts
- What
- Submitted recommendations for tax relief and budget expectations
- When
- Budget to be announced on February 1, 2026
- Where
- India
- Why
- To incentivize long-term savings, reduce transaction costs, and encourage participation in capital markets
- Organization
- Association of Mutual Funds in India (Amfi)
- Recommendations Submitted
- 27
- Debt Fund Holding Period
- More than 36 months
- Current LTCG Exemption Limit
- Rs 1.25 lakh
- Proposed LTCG Exemption Limit
- Rs 2 lakh
- Current TDS Threshold
- Rs 10,000
- Proposed TDS Threshold
- Rs 50,000
- Minimum Investment in ELSS
- Rs 500
- Budget Announcement Date
- February 1, 2026
- Defence Budget Increase
- 8% year-over-year
Sources
Tax sops, restoring indexation among Amfi budget wish list
Sebi, Amfi in talks on cutting KYC, depository charges with an eye on mutual fund profitability
Long-term capital gains in focus: What Indian investors expect from Budget 2026
Budget 2026: Seen neutral from market lens; Nuvama prefers telecom, internet, IT
Indexation benefit coming back? Will Budget 2026 revisit recent mutual fund tax changes
