None of the country's fund houses admit to be doing any dividend stripping, they've each told the Securities and Exchange Board of India (Sebi).
On Wednesday, the regulator had asked fund houses to confirm by Thursday if they were. The term refers to the practice of using dividends declared by a scheme to lower one's tax liability. Investors, then, essentially pocket the dividend and show a reduction in the net asset value (NAV) as a capital loss, to be adjusted against capital gains from any other investment.
"Nobody has gone into the past, since the regulator’s e-mail does not specifically ask for past violations but only the current status,” said a fund official.
