Ask Value Research

Dividend Distribution Tax on debt funds

Any dividends declared by mutual fund houses are exempt from tax in the hands of investors

What are the rates of Dividend Distribution Tax (DDT) for individual and non-individuals? Are there separate rates for liquid funds and other debt funds?
- Vipul Ashara

Any dividends declared by mutual fund houses are exempt from tax in the hands of investors. However, in debt mutual funds, AMCs pay Dividend Distribution Tax (DDT) from the distributable income at the rate of 28.33% (including surcharge and cess). There is no DDT on equity mutual funds. All non-equity funds, including liquid funds, have the same rate of DDT.

This article was originally published on December 23, 2015.

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