Business Today

Mutual Fund

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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.

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