Dividend Distribution Tax

In India, domestic companies that declare, distribute or pay dividends are subject to dividend distribution tax at 16.61% on the amount of such dividends. However, income distributed by a specified company or mutual fund is taxable at differential rates as follows:

• Income distributed from the Money market/liquid funds is taxable at 27.68%

• Income distributed from other mutual funds to individuals or HUFs is taxable at 13.84% and to others at 22.15%.

However, no additional tax is payable on income distributed to unit holders of equity oriented funds.

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