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Dividend

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wht is the meaning of dividend stripping?


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Dividend stripping refers to the practice of using dividends declared by a scheme to lower one's tax liability. Investors essentially pocket the dividend and show reduction in the net asset value (NAV) as capital loss to be adjusted against capital gains from any other investment.

“Dividend stripping is a quick way of shoring up assets. It is also a way of favouring select corproates and high net worth individuals, who can use it as a tax-saving tool,” said a fund official on condition of anonymity.

It refers to enjoying the benefits of cum dividend + possibility of capital loss after the record date


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