Dividend Reinvested Income

This query is : Resolved

Mangesh Ramane (Querist)
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16 June 2011 Dear Sir,

I wanted to know dividend reinvested with Mutual Fund, is it income or investment? if it is income then is it taxable or not?

Kindly clarify this....

Thanking You,

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
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16 June 2011 It is both income and Investment. Entry in books of acconuts is as follows:

Dr Investment in Mutual Fund a/c
Cr Dividend from mutual funds a/c

Any dividend received from mutual fund whether in cash or reinvested is exempt from income tax.