Mutual Fund
Ajit Kumar: I have made two investments in equity mutual funds via SIP and I have opted for dividend reinvestment. I have heard that there is a new tax on dividend schemes. I do not require a regular income right now as I am saving for a goal which is seven years away. What should I do to save taxes?
Achin Goel, Head, Wealth Management and Financial Planning, Bonanza Portfolio, replies:
Yes, you are right. A dividend distribution tax of 10 per cent is now charged on equity MF. As you do not require a regular income, you should stop the dividend schemes and start new SIPs in growth options.