1 min read.Updated: 31 Mar 2021, 04:41 PM ISTNeil Borate
However, this action of the fund house has left retail investors with a tax bill as dividends are taxed at slab rate
SBI Mutual Fund has declared dividends on its Nifty and Sensex ETFs (exchange traded funds) cumulatively to the tune of 2.5% of their NAV (net asset value) in February and March 2021. In absolute terms, this works out to around Rs3,400 crore on a combined assets size of Rs137,533 crore of its two ETFs. According to a person with knowledge of the matter, the dividends were declared to enable the Employees’ Provident Fund Organization (EPFO) to realize some gains and pay out subscribers. Institutions account for 90-95% of the AUM of the schemes, the person explained. Dividends have not been declared in the retail investor dominated schemes like the ELSS fund, he added, in order to protect investor interest. However, this action of the fund house has left retail investors with a tax bill. Dividends are taxed at slab rate.