What are the tax benefits investors get by investing in Mutual Funds?
Since, April 1, 2003, all dividends declared by debt-based mutual funds are tax-free in the hands of the investor A dividend distribution tax of 12.5% (including surcharge) is be paid by the Mutual Fund on the dividends declared by the fund. Investors in ELSS schemes can avail rebate under Section 88 of the Income Tax Act, 1961 on investment upto Rs 10,000 subject to the various conditions laid down in the said Section. The actual amount of rebate depends on the level of income of the investor.
