A higher tax exemption limit, a revamped central KYC system and the govt’s greater emphasis towards ‘ease of doing business’ in an expected lower interest rate regime are likely to boost investments into mutual funds, directly or through the systematic investment plan (SIP) route, fund industry players said.
“The rollout of the revamped Central KYC registry in 2025 is a significant step toward streamlining investor onboarding, reducing redundancies, and enhancing transparency in financial transactions.This and the govt’s continued emphasis on ease of doing business will create a more investor-friendly environment, making financial markets more accessible,” said Venkat Chalasani, chief executive, AMFI, the fund industry trade body.
“The introduction of new income tax slabs is set to increase disposable income, encouraging higher savings and investments among individuals. These initiatives collectively position the Mutual Fund industry for expansion, ensuring greater participation and investment opportunities for retail and institutional investors alike.”
On Saturday the FM proposed that from April 1 this year, people earning up to Rs 12 lakh won’t have to pay any income tax, up from Rs 7 lakh now. This move is estimated to put between Rs 50,000 to Rs 1.10 lakh into the hands of taxpayers annually. And part of this extra money could be invested in mutual funds.
“Cutting personal taxes may lead to higher savings, which might result in increased SIP flows, potentially supporting the markets further,” said Deepak Ramaraju, Senior Fund Manager, Shriram MF.