There was a little confusion amongst Investors of Mutual Funds regarding TDS on Dividend and Capital Gain which is not cleared by IT Department.
The Income Tax Department on February 4 clarified that the Budget proposal of 10 percent tax deduction at source (TDS) will be applicable only on dividend payment by mutual funds and not on gain arising out of redemption of units or capital gains.
So, you don’t have to worry about Long Term Capital Gain, you have to just pay TDS on Dividends declared by mutual funds from time to time.
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