The mutual fund industry is expecting a Rs 50,000 increase in basic income-tax exemption limit to Rs 3 lakh in the Budget to be presented tomorrow.

If done so, this can leave an additional liquidity of Rs 50,000 crore in the hands of taxpayers, a part of which can go into investments.

The mutual funds industry also wants that money coming under capital gains to be invested in infrastructure mutual fund products.

“We do hope that the finance minister will increase the basic I-T exemption limit to Rs 3 lakh. If it happens, more fund is likely flow into the mutual fund industry which will help further increase the assets under management which stands around Rs 13.4 trillion,” LIC Nomura Mutual Fund chief investment officer Saravana Kumar told PTI.

Expressing similar views, Taurus Mutual Fund chief executive Waqar Naqvi said, “I expect the Budget to increase the basic income tax exemption limit to Rs 3 lakh. This can leave an additional Rs 50,000 crore into the hands of the taxpayers, a part of which can come into the mutual fund industry.”

Naqvi also said that government must allow money coming under capital gains to be invested in the infrastructure funds of the fund houses.

“I also hope capital gains to be invested in the infrastructure mutual fund products. As of now, when one gets capital gains, one is liable to pay capital gains tax.

However, if the government allows this money to be invested in infrastructure MF products, then one will be able to avoid paying capital gains tax.

“Moreover, the amount will be deployed by the MF industry for infrastructure projects which will further help nation-building,” he added.

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