Dividend Reinvested in MF Tax Saver Fund. Can I claim deduction u/s 80C the Dividend amount which is reinvested in same fund.
13 Replies
Amir
(Learner)
(4016 Points)
Replied 26 March 2010
Deepak Sir,
Yes U can , Each dividend reinvestment is treated as Fresh Investment.
I can support it with the interest which is reinvested under NSC.
praveen
(Chartered Accountant)
(6971 Points)
Replied 26 March 2010
Yes Amir is right .
Deduction is allowed for investing in ELSS u/s 80C does matter if you invest from dividend or some other non taxable income.
CA Pramod Jain
(manager finance)
(1577 Points)
Replied 26 March 2010
ya u can claim it bcoz its a fresh investment
Nagarajan
(CA Final(NEW))
(42 Points)
Replied 26 March 2010
Then what will be the capital gain on redemption of MF?
because dividend which is reinvested is tax free!!
CA Ayush Agarwal
(Kolkata-Pune-Mumbai)
(27186 Points)
Replied 26 March 2010
That Capital Gain is Taxable
Renuka grad CWA,CA
(associate)
(36 Points)
Replied 26 March 2010
ya u can claim deduction U/S.80C..reinvestment of dividend wl b treated as fresh investment..
Deepak Tapse
(Accounts Manager - Taxation)
(1771 Points)
Replied 26 March 2010
But this not a redemption amount, so the question of capital gain is not arised.
Pl carify if i am worng.
Nagarajan
(CA Final(NEW))
(42 Points)
Replied 26 March 2010
if NAV of that MF is neither increased nor decreased and on daily basis dividend declared and the same is reinvested.
then cost portion of MF wont change at the same time increased amount is due to dividend reinvested which is already tax free.
Then there will be no chance of capital gain. correct? if not correct...
C.Balaji
(Learner)
(1867 Points)
Replied 26 March 2010
Dear Deepak sir........
Friend Ayush has answered to the query of Mr.Nagarajan..........just above Aysush's reply.....
tapesh Kumar
(ARTICLE)
(46 Points)
Replied 26 March 2010
The dividend received is exempt from tax but can be used as investment under section 80c.
in case of capital gain, long term capital gain on mutual fund is itself exempt from tax.
the dividend reinvestment wil the nature of SIP and taxable accordingly.
Short term capital gian shall be taxable @ 15% + 3% Education cess.
anshul bafna
(student)
(522 Points)
Replied 27 March 2010
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