Last Updated on February 1, 2020 at 3:08 pm
The finance minister announced today that tax on dividends from shares and mutual funds (both equity and debt) will be taxed as per slab of the recipient.
The finance minister said: “The dividend shall be taxed only in the hands of the recipients at their applicable rate”
Thus the flat rate at which DDT was taxed for shares and mutual funds at source (by the company or mutual fund house) will be removed. The govt believes they will be able to track dividends with the advent of technology and deduction at source is not longer required.
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This is a good move with respect to mutual funds as the growth option will be become the naturally preferred option and mis-selling will be avoided. Stockholders will certainly feel the pinch as they now have to pay tax as per slab on the dividends received.