Before investing in the mutual fund world, any money market investor should have at least a basic understanding of equity fund strategies and how taxation of equities works. Equity investments generate two types of income: capital gains and dividend income.

While capital gains enter the equation when assets such as shares or equity mutual funds are sold at a profit in terms of the rate of acquisition, the dividend is the portion of the profits that a company distributes to its shareholders.

Taxation Of Dividends

The dividends are added to the total income of the resident shareholders and are taxed according to their applicable income tax slab rates. In a supportive structure for the shareholders, the taxes incurred on dividends by individuals in the lower income brackets are naturally l

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