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Tax Treatment on Equity Funds

Dr. Verma wants to know if he can adjust any equity fund loss against dividend received while computing tax

I had sold SBI Blue Chip for Rs. 9000 which I bought in NFO at Rs 10000 at NFO after about two years and in between received Rs 2000 as dividend. Whether my loss of Rs. 1000 is considered as long term capital loss or it will be adjusted against dividend for computation of income tax.
-Dr. Sanjay Verma

SBI Blue Chip fund is an equity fund and dividend from equity fund is completely tax-free in the hands of the investors. As far as tax on Capital Gains is concerned, investors in equity schemes are liable to pay Short-term Capital Gains Tax which is 15% of realised gains on investments held for less than 1-year. For gains on investment held for over 1-year is tax free. Your capital loss will not be adjusted against dividend but you can claim loss if you have held your fund for 270 days prior to the dividend payment.

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