Birla Cash Plus has taken a lead in luring investors with heavy dividend. It has declared a dividend of 22.69 per cent (Rs 2.269 per unit). The record date for the same is March 28, 2002.
This was expected from some of the bond funds whose NAVs are above Rs 12 in their dividend option, as the tax treatment will be modified by April 1, 2002. Currently, dividends from mutual funds are tax-free in the hands of investor. As the current tax rules expires on March 31, 2002, it is perhaps the last opportunity for the dividend plans of bond funds to distribute heavy dividends for their investor's benefit. By paying dividend now, investors will be charged the lowest possible tax on their gains.