Dilshad’s comments in Outlook Money. November 2017 Preparing for a baby Outlook Money November 2017- Excerpts Dilshad B
Preparing for a baby
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Withdrawal of dividend amount, by redemption of units in a debt fund before one year, is more beneficial than opting for a dividend, even though dividend distribution tax paid by the fund is just 14.126%. This is because, the withdrawal consists of partly principle amount, and hence, tax liability is only on the interest component which is minimal.
The equation works better, if withdrawal from a debt fund is done after one year, where long term capital gains tax is reduced to 10% and dividend distribution tax paid is 14.126%.