Many of us would have dipped into our mutual fund (MF) investments before March 31; the end of the financial year 2019-20. But withdrawals from MFs attract tax. Here’s what you should know about how gains are taxed.
Are dividends and capital gains taxed?
Budget 2020 made dividends taxable. However, for the year (FY) 2019-20, dividends are tax-free. So, if you’ve earned dividends till March 31, 2020, then your dividends were tax-free in your hands. However, your fund house would have paid dividend distribution tax (DDT) of 29.12 percent, including tax and surcharge in the case of a debt fund and 11.648 percent for an equity fund. The same should however be reported under Schedule-EI of the relevant ITR of AY (Assessment Year) 2020-21.
