In this article we will elaborately discuss about how the tax on dividends earned from mutual funds, often referred as DDT (Dividend Distribution Tax) are charged. One must be aware that, there is no action that need to be taken from the investor's side as these dividends are already tax deducted before being credited to the investor's bank accounts.
Tax on Mutual Fund investments are often termed as Capital Gains Tax. These are further classified in to STCG, Short Term Capital Gains and LTCG, Logn Term Capital Gains depending on the tenure of holding the Mutual funds.
Many mutual fund investors have questions about how the income obtained from Mutual Funds are taxed. Well, the fact is the taxation varies for various mutual fund schemes. This article targets the budding investors and tries to explain the tax rates applicable on fund returns for equity and debt mutual fund schemes in simple terms.