dividend income from mutual funds?

Is Dividend income from mutual funds is taxable in india ? .IF received the dividend from ELSS scheme and if i reinvest the dividend into same scheme, do i get benefit under 80 C. do I need to show dividend as income in my return ?

2 Replies to “dividend income from mutual funds?”

  1. Yes. The Dividend re-investment is also like a new investment and you are allowed exemption u/s80C.

    You have to show the tax free dividends in ITR return form under:

    Schedule EI; Details of Exempt Income (Income not to be included in Total Income)

    I advise you not to opt for dividend re-investment plan. Instead of that go for Growth option.

  2. MFs are of two types:
    1. Equity MFs
    2. Debt MFs
    Dividend from Debt MFs is treated as capital gains and is taxed accordingly.
    Dividend from Equity MFs is tax free if the fund is held for more than one year.
    ELSS is Equity MF.
    Dividend from ELSS if reinvested is eligible for exemption under 80C.
    If you show dividend as Income from Other Sources than the same will have to be exempted under Exempted Income.

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