Dividends from debt funds are tax free in the hands of the investors
06-Apr-2016•Research Desk
Are dividends from liquid funds subject to tax? If so, at what rate?
-Rajashekhar
Investors do not have to pay tax on the dividends they receive from mutual funds. However, fund houses are liable to pay a dividend distribution tax (DDT) at the rate of 28.325% (including surcharge and education cess) before distributing dividends to the investors. Therefore, in effect, the dividend that you receive in your hands is after tax, which has already been paid by the fund house.
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