Encouraged by tax incentives for investment in retirement schemes floated by mutual funds (MFs), several fund houses, including IDBI MF, Birla Sun Life MF, DSP Blackrock MF, Axis MF and SBI MF, have approached Securities and Exchange Board of India (SEBI) to launch retirement-linked MFs.
Reliance Capital Asset Management Company had taken government approval for the first-ever equity-oriented pension scheme, in December 2014, giving tax benefits to investors.
Retirement funds floated by fund houses have been given tax benefits in line with pension funds, to attract long-term domestic savings into the equity market in the Finance Act 2015.
Earlier, only insurance companies were allowed to offer pension products with tax incentives. Investments in these schemes are eligible for a deduction under Section 80 C of Income-Tax Act up to a limit of Rs1.5 lakh.