Vital information for these investing in mutual funds, authorities clarifies about new tax on earnings – Mutual Funds India Funding Plans Newest Information CBDT says 10 p.c TDS relevant solely on dividend cost by mutual funds | Enterprise – Information in Hindi


Mutual fund-government gives clarification about new tax, will have direct effect on your profit

Know what has been decided about the proposal of 10% TDS

CBDT issued a clarification on the decisions made in the budget for those who invest in mutual funds, saying that the proposal of 10% TDS in the budget will only apply to the dividend paid by the mutual fund.

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  • Last Updated:
    February 5, 2020, 9:48 AM IST
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new Delhi. CBDT issued a clarification on the decisions made in the budget for those who invest in Mutual Funds, saying that the proposal of 10% TDS (Mutual Funds Scheme) in the budget will be applicable only on the dividend paid by the mutual fund. This will not be applicable to the profits arising out of redemption of the unit. In simple words, only the mutual funds schemes where dividend is available will be taxed. At the same time, if you withdraw your money from the scheme, no tax will be paid. Let us tell you that the government has taken a big decision regarding dividend distribution tax. The government has proposed to remove the Dividend Distribution Tax on companies. Under the new decision, the investor will now pay the tax on the dividend.

what will happen now- Suppose if you If mutual fund scheme (Mutual Funds Scheme) provides dividend, then TDS will have to be paid on dividend at the rate of 10% under 194K. This means that only selected schemes will be taxed. At the same time, whenever you withdraw money from your scheme (except dividend scheme), according to the new proposal, TDS will not be deducted.

Experts say that investors are advised to invest in Dividend Scheme, who do not want to take too much risk and want some income. Investors who want to build big assets in the long term through SIP, should opt for the growth scheme. The reason for this is that the benefit of compounding does not get due to getting dividend.Read this too – you have also taken LIC policy, then know what will be the effect of this decision of the government

What are the dividend paying schemes? Experts say that dividends are not available in all schemes of mutual funds. Dividend is declared in his scheme when he makes a big profit from his portfolio. The fund manager who runs the scheme buys and sells the shares, which makes a profit. In the case of debt funds, the portfolio gets interest or dividend on investment in bonds. The fund manager can distribute such amount to investors as dividend.

The scheme of a mutual fund can declare a dividend every day, every month, every quarter or once a year. It also depends on the category of the scheme. Suppose many hybrid plans or monthly income plans try to give a dividend every month to the unitholders.

However, getting a dividend is not sure and it is not even sure how much amount will be received as a dividend. Net asset value (NAV) is not allowed to increase in dividend scheme. Whenever the NAV reaches a certain level, the asset management company declares the dividend.

Also read- Modi government gave 34.85 lakh crore rupees to farmers in 3 years!

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First published: February 5, 2020, 9:37 AM IST

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