I see more and more people getting sucked into and at times it’s also a conversation done by the client by virtue of having heard it somewhere or otherwise, that let me invest in that fund and that dividend that you want to give me or at times the client gets sucked into it by wrong advice. Now, can you talk a bit about this dividend that is declared, and the way people go in for that believing that that’s the Holy Grail.
JUZER GABAJIWALA: What happened is, if we maybe go back to around 2018, till that time dividends were tax free. So that was our biggest advantage which was there. So, we used to have something called as dividend distribution tax. So, the tax was being paid by the fund house, as far as the investor was concerned he was getting dividend which was tax free. So everything was quite hunky dory. Then we were also witnessing at one side that the fixed deposit rates were dropping. Interest rates were coming down, and people obviously are used to getting a particular amount of money. So, we have a lot of these balanced funds at that point of time. So, this balance is a hybrid with an equity type of taxation and a lot of people started investing over there because the dividend was tax free. The tax was still being paid by the mutual fund, that also not many people were realising, but since you are getting it tax free you are oblivious of the fact that somebody else is paying the tax—but the whole scenario underwent a change, effective April 1, 2020. The finance minister in the budget announced that now dividend is taxable. So that was a real change so previously the equity shares—they were also taxed provided the income exceeded a particular amount and even the mutual fund was tax free. After the announcement, now, you face two problems. One is that not only are you paying tax on the dividend income, but the second thing what will happen is that even your tax slab could undergo a change. So, to give an example, an investor was all along getting a good, hefty dividend amount and his taxable income was very low, let us say he was in the 10% or 20% tax bracket. So, he was earning seven-eight lakhs and he could be earning around seven eight lakhs by way of dividend, so his tax level also now changes. So, from 20% he will now come into the 20% tax slab. So, first of all, now he will start paying tax on the dividend. Secondly, what he would have been paying as 20% would be moved into the 30% tax slab and one needs to understand that in mutual funds, the dividend which is declared is more out of selling of shares. It is not like a company dividend, where the company’s dividend is more determined by the amount of sale of the products. So, whether you get a capital appreciation or whether you get a dividend, at the end of the day, both are the same. So, for a dividend option to be in a mutual fund, according to me, it’s not a very good decision and we have been trying to educate our customers across the board that it is extremely tax inefficient for you to stay invested in a dividend option today.