Post-Budget, growth option becomes more attractive for MF investors

Unlike MF investors, those betting on direct equities may feel the pinch because dividend payout is not under their control

Mutual fund investors, who have selected the growth option, can finally heave a sigh of relief after the Union Budget.

With Finance Minister Nirmala Sitharaman deciding to move the tax incidence of dividend distribution tax (DDT) from companies to individuals, the liability for this category of investors would fall dramatically.

But how? Even if they redeem their mutual fund units after a year or so, they will only pay a long-term capital gains tax of 10 per cent for over Rs 1 lakh.

Whereas, if they had taken the dividend option, the tax rate would be according to their income