Can someone pls confirm if this is correct.
here is the link https://www.valueresearchonline.com/story/h2_storyview.asp?str=45809
In a mutual fund, ALL the profits belong to investors, except for management expenses of up to about 3 per cent. Whether the money comes to you as dividend or as withdrawal, there is no difference, except for the effect of taxation. As I’d explained last week, if the value of your investment in a mutual fund is Rs 1 lakh, and then the fund gives you Rs 5,000 dividend, the value of that investment will be reduced to Rs 95,000. In debt funds, what you receive is actually Rs 3,558 because the debt fund would withhold 28.84% of the dividend and pay that as tax. In equity funds, there was no such tax till this year. Now, even in an equity fund, there’s a 10% tax. Accounting for the surcharges, you will get Rs 4,353 as dividend while your investment goes down by Rs 5,000. Thus, it makes no sense to opt for a dividend plan.