Nirmala's changes are not mutually beneficial.

Managers want to see budget proposals for the economy to return to the path of growth, while they feel that FM's proposal to eliminate in favor of lower tax rates can hamper household savings.

Nilesh Shah, MD and CEO, said the budget was good in intention. “However, the key is an efficient execution on a temporary basis. There are many positive aspects to simplify things and encourage entrepreneurs, but again, the key will be the execution within a certain period. The intention must become implementation, Shah said.

Fund houses are protected from their reaction to the FM proposal on the reduction in the number of tax exemptions. At present, investments of up to 1.5 lakh rupees per year in ELSS by fund houses qualify for tax exemptions under section 80cc according to tax laws. The personal tax reductions were well intentioned, but the other side is that the elimination of exemptions could have negative implications for savings, said ED&CIO, SBI MF.

As of December 2019, through assets under management (AUM), ELSS was the third largest among the categories of equity funds, contributing almost Rs 1 lakh crore to the total AUM segment of Rs 15.5 lakh crore.

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