sorry monish i beg to differ. assume i invested 1000 rupees this year (apr 2007) and got 200 rupees as dividend in (mar 08)i can withdraw the units bought for the 1000 investment made exactly after 3 years ie in apr 2010 whereas the units purchased out of div. reinvested in mar08 can be withdrawn by me in mar 2011. in the meanwhile i get 30% tax benefit on the 200 rupees dividend. isn't this good