Dividend Reinvested

Deepak Sir,

Yes U can , Each dividend reinvestment is treated as Fresh Investment.

I can support it with the interest which is reinvested under NSC.

Yes Amir is right .

Deduction is allowed for investing in ELSS u/s 80C does matter if you invest from dividend or some other non taxable income.

ya u can claim it bcoz its a fresh investment

Ya u can claim...

Then what will be the capital gain on redemption of MF?

because dividend which is reinvested is tax free!!

That Capital Gain is Taxable

ya u can claim deduction U/S.80C..reinvestment of dividend wl b treated as fresh investment..

But this not a redemption amount, so the question of capital gain is not arised.  

Pl carify if i am worng.

if NAV of that MF is neither increased nor decreased and on daily basis dividend declared and the same is reinvested.

then cost portion of MF wont change at the same time increased amount is due to dividend reinvested which is already tax free.

Then there will be no chance of capital gain. correct? if not correct...

Dear Deepak  sir........

Friend Ayush has answered to the query of Mr.Nagarajan..........just above Aysush's reply.....

The dividend received is exempt from tax but can be used as investment under section 80c.

in case of capital gain, long term capital gain on mutual fund is itself exempt from tax.

the dividend reinvestment wil the nature of SIP and taxable accordingly.

Short term capital gian shall be taxable @ 15% + 3% Education cess.

It is a good investment Technique..