Is dividend income earned from a mutual fund is exempted from income tax?

[Madhura]

Is dividend income earned from a mutual fund is exempted from income tax?

[Rahul]

Dividend income earned from a mutual fund is exemped if the 50% fund of the MF is invested in stocks. It is fully exempted in ELSS funds.

[Rajat Gupta]

Dividend income earned from a mutual fund is exemped if the 50% fund of the MF is invested in stocks. It is fully exempted in ELSS funds. Is there any condition attached to it like after one year of holding of MF?

[Rahul]

Is there any condition attached to it like after one year of holding of MF?
The above rebate is for equity MFs -
If you sell the units within a year of buying, it will attract a short-term capital gains tax of 10%.
If you sell the units after a year, no long-term capital gains tax.

[Rahul]

It is exempt under sec 10 of income tax act.

[vvivek22]

Irrespective of the Holding period, the dividend from Mutual Fund is Exempt from Tax.

This is because, while giving dividend, the MF Company already pays Dividend Distibution Tax (DDT).