What are the rates of dividend distribution tax (DDT) for individuals and non-individuals? Are there separate rates for liquid funds and other debt funds? Does Birla SL MIP II Wealth 25 Plan come under debt-oriented mutual fund for DDT?
-Mukesh
Yes, Birla SL MIP II Wealth 25 Plan is a debt-oriented mutual fund. Earlier the dividend distribution tax (income distribution tax) were different for individual/HUF and domestic companies, and it was also different for debt and liquid funds. The differences are no longer applicable.
Now there is a uniform tax on dividend for all debt mutual funds at the rate of 28.33% (including surcharge and cess) of the dividend amount. It is paid by the fund house at the time of declaring the dividend. So the dividend that is paid out to the investor is after deducting the DDT. Hence there is no further tax to be paid by the investor.
This article was originally published on January 19, 2017.
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