BHARTI AXA Life has started offering its new child plan — Bright Stars PLUS — with a feature that promises to hand out 7% of the fund value as ‘Jumpstart’ benefit. Like several other child plans, this product comes with a waiver of premium benefit in the event of the policyholder’s death. In such a circumstance, the company undertakes to pay the regular premiums into the policy till maturity. Policyholders can choose from five fund options, and are allowed 12 free switches a year between these funds.
DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT. The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...
