there is no tax on dividend from equity funds and there is no long term cap gains too. dividend reinvest and growth have the same effect as per current tax laws. AS for ELSS "Div. Reinvest" is the best as the dividend reinvested is also treated as fresh investment and gets locked in for another 3 years. advantage is - suppose u invested 70 k in ELSS and it declared a dividend (say rs. 32 k) in march then u ur 1 lak under 80 c is done, while only 70k has gone from ur pockets. logically div. reinvest is the best for ELSS, while for other equity based schemes it is as good as growth. div payout is worst as it does not allow u the value of "compounding". DONT KNOW WHY REDIFF PUBLISHES WITHOUT PROPER RESEARCH
RE:RE:dividend reinvest is a good option
by Monish Gavand on Apr 08, 2007 11:46 AM Permalink
Boss this is the worst thing. assume the elssmf pays you 20 % dividend every year and that div is reinvested, the reinvested dividend amount is also locked in for another 3 year from the date of the dividend. you will never be able to close that account if they declare dividend every year. you will be dead but your account will continue to exist as there is no way to close that account.
RE:dividend reinvest is a good option
by utpal ganatra on Apr 08, 2007 01:28 PM Permalink
Money is made by mfs company, and customer has to loose more. I think it would be 60%-40% ratio for mf(company)s-customers ,whenever profits are counted. Or may be 80%-20%. Don't know. how much.
RE:dividend reinvest is a good option
by Ajit Kurup on Apr 08, 2007 02:17 PM Permalink
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 reinvested in mar08 can be withdrawn by me in mar 2011.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
