Could you plz clarify under what special conditions dividends are taxable? (Mutual Fund dividends are not supposed to be taxable, right??) What is the rate of tax? Since when has this rule been implemented?
Can there is facility to swift from Dividend Reinvestment plan option to Growth. Can any one pl. illustrate an example of Dividend Reinvestment and Growth for lock in period of 3 years
RE:Dividend reinvestment to growth
by vasanth raja on Apr 08, 2007 02:30 PM Permalink
In ELSS funds it's not possible because there is a lock in for 3 years after that u can switch.But in other open ended fund it's possible.In this case,it'll be considered that exit from one plan and changed to other plan in the same scheme.hence for Equity Oriented open ended fund,it'll attract a Security Transaction tax (0.25%) from the exiting fund(Dividend Reinvestment option) and an entry load of Growth Fund(2.25%) is also applicable.
Plz let me know if MF allows switch from divident to growth or divident reinvestment to growth or vice versa. Also, the tax implications,if any ! best wishes
Does that mean if I opt for "Dividend Reinvestment" option in a Equity fund, I do not need to pay taxes on dividends? What happens when I sell the units after 3 years? Somebody please answer...
RE:Query
by Dilip on Apr 04, 2007 02:56 PM Permalink
No, There will be tax on the Dividents, then the amount will be Re invested. In the Growth option, for Equity funds, long term tax is nil. logically, for the long run, growth option sounds better.
RE:RE:Query
by Ajay Pai on Apr 04, 2007 11:51 PM Permalink
In addition, if you are going for dividend then does not Payout and reinvest yourself make sense coz u get the money in hand and show the same dividend amount for the 1lakh limit? Anyway dividends are not taxed as income right ???
I had invested some money in Sundaram tax saving fund ( Dividend option) in 06. Since the lock in period is three years, Can I expect atleast 25 % gain over my investments at the end of the period.? Considering the way in which the SENSEX is tanking down, is 25 % ROI a realistic figure?.
As far as the article is concerned, it is simple and very clear to understand. Good Work!
RE:Tax on MF's
by Nand Gupta on Apr 04, 2007 07:25 PM Permalink
I think 25% over a period of 3 years is a very realistic figure the way indian market is going up.
RE:TAX SAVING FUNDS
by gopal agrawal on Apr 04, 2007 01:09 PM Permalink
SBI Magnum Tax Gain Sceme and Franklin Templeton Tax Fund are 2 of the better funds in this category
RE:TAX SAVING FUNDS
by Ajay Pai on Apr 04, 2007 11:53 PM Permalink
guru.. i suggest to do some research and invest rather than taking tips... afterall its your hard earned money yaar...
