Budget 2020 has removed dividend distribution tax (DDT) and made dividends taxable in the hands of investors. Also, it has introduced tax deduction at source (TDS) at 10 per cent if the dividend declared by mutual funds exceeds ₹5,000 in a year.
Presently, mutual funds deduct DDT first and then hand over the dividend to unit-holders.
From April 2020, the dividend amount will be added to the taxable income of the investor and taxed as per his/her tax bracket.
Currently, when mutual funds declare dividends, they pay tax at the rate of 10 per cent and 25 per ...
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