With the introduction of a 10% tax on long-term capital gains and dividends, equity-oriented mutual funds will feel the pinch as their returns will now be reduced to some extent. However, investors should not feel demotivated because equities still remain efficient as compared to other asset classes in the long term. Also, investors who prefer the dividend option of equity-oriented funds can explore the Systematic Withdrawal Plan (SWP) feature in the growth option of mutual funds as an apt alternative.
In a nutshell, equity mutual funds despite being taxed now will continue to remain a superior asset class in comparison with other asset classes. For investors who need a regular income, an SWP in the growth option of equity funds can be a better bet than the dividend option.
An Investor Education Initiative by Mirae Asset Mutual Fund
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
All Mutual Fund investors have to go through a one-time KYC (Know Your Customer) process. Investors should deal only with Registered Mutual Funds (RMF). For further information on KYC, RMFs and procedure to lodge a complaint in case of any grievance, you may refer the Knowledge Center section available on the website of Mirae Asset Mutual Fund.