Mutual funds

https://www.financialexpress.com/news/dividend-reinvestment-is-not-a-constructive-transfer/533117/

The above link says the shift from scheme is also a transfer but need some more clarity on this...

Dear Swathi,

yes shift in scheme of MF means that he sells off the units of one scheme and invests them into another. the only thing being the funds, without coming to his bank account, are directly invested into the new scheme

hence it is sale of the units

Thanks for the reply Ankit...

will it apply to both dividend payout to dividend reinvestment scheme and dividend payout to growth scheme?

No it will not amount to Redemption. It is only  Mere a book entry transfer used to pass by the mutual fund company. 

The link from financial express says it will not be considered a transfer when changed among divdend schemes... any reference material you have for the same?

yes it applies equally to all the schemes.

the only thing is that in case of a switch out from dividend reinvestment scheme to any other scheme, the cost of acquisition in respect of the div reinvested, will be the NAV on the date of declaration of dividend

Hardesh is very truly said.. switch entry never effect Capital Gain...  see switch Option only availabe in  inter transfer of your fund in particular AMC.. kotak equity growth TO kotak equity Dividend is inter transfer so at that time CG is not attract..

Dear Swathi,

1) when you transfer from Growth to Dividend Option(Payout/Re-investment) or vice-versa,Capital Gains would be attracted.

2) However,transfer from Dividend Payout to Re-investment or vice-versa would NOT attract any capital Gains.

Please note that the NAVs of Dividend Pay-out and Re-investment are the same and it is just a matter of choice for the investor whether he wants to receive the dividend in hand or not.On the contrary,the NAV of a Growth Option is different from the Dividend Option and any switch between them is equivalent to switching schemes.

Balaji has correctly answered.