Should I show mutual fund dividends in my Income tax return

I have invested in arbitrage funds and ELSS SIP. I am getting dividend reinvestment as well as dividend. I want to know where I should show these dividends in Income Tax and whether both dividends i.e reinvest and dividends out to be shown in Income Tax Return. Till know I used to file ITR 1 FORM and now should I continue to file ITR 1 or I have changed ITR FORM and if so which ITR form is to be used. Shall be grateful for your expert advice.

Jun 25, 2018 by R C THUKRAL, Delhi  |  Mutual Fund

Plutus Answers:

Good to know that you have invested in Arbitrage Funds and ELSS Funds.

Please note that you have to show both – dividends received as well as the dividends reinvested.

Dividends received are tax free in your hand as the AMC pays the dividend distribution tax. But still you have to show it in the ITR as 'Dividend Income' even though no tax will be applicable on that.

Dividends reinvested are also need to be shown as you are getting units in lieu of the dividends. Here again, no taxes are payable on the acquired units.

With regards to which ITR form to be filled in, will depend on what is your total income, do you have income other than salary or do you have any professional income and so on. We suggest that you consult a income tax expert on this matter.

To know more about mutual funds, do visit our Blog section and Knowledge centre

Thanking you for writing to us.