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dividend stripping

Kiran Sharma (34 Points)

13 October 2017

what is "dividend stripping"

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Dividend stripping is a strategy to reduce the tax burden, by which an investor gets tax free dividendby investing in securities (including units), shortly before the record date and exiting after the record date at a lower price, thereby incurring a short-term capital los

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Aditya Sharma (39 Points)
Replied 13 October 2017

Samir.. It is not a strategy of tax reduction.
Rather its intent is exactly the opposite .

Here... Simply... If u buy a share withing 3 months prior to record date and sell the same within 3 post record date AND u incur losses.
Then....
The loss that u can carry forward shall be reduced by an amount of tax free Dividend that u recieved during the said period.

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