Career Search

Wednesday, October 1, 2014

Computation Of Dividend Distribution Tax With Effect From October 2014

One of the key changes proposed in the Union Budget of 2014 regarding the Mutual Fund (MF) Industry pertains to Computation of Dividend Distribution Tax (DDT) for income distributed by a non-equity oriented mutual fund scheme.

Currently DDT is being applied on net dividend payout. As per Finance (No. 2) Act 2014, the DDT rates will be applicable on gross dividend amount, with effect from October 1st, 2014.

Therefore, while the DDT rate remains the same, the way in which the DDT is calculated would change and the net dividend amount from debt and liquid mutual fund schemes would reduce going forward.

Please find below an illustration on dividend payment considering the change in DDT computation where for easy understanding, we have assumed DDT@25%*:

  Prior to Budget 2014-15 As per Finance (No. 2) Act 2014 (effective date Oct 1st 2014)
A.  Dividend declared (in Rs).   100  Dividend declared (in Rs).   100
B.  Net Dividend (in Rs.) B=A/1+DDT   80  Net Dividend (in Rs.) B=(A-C)   75
C.  DDT (25%) C=(A-B) or Bx25%   20  DDT (25%) C=(AxDDT)   25

*DDT Rate for Individuals & HUF.DDT is subject to surcharge and education cess.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)