Nippon India Mutual Fund Declares Income Distribution for Balanced Advantage Fund

Nippon India Mutual Fund has announced an income distribution of ₹0.20 per unit under the IDCW (Income Distribution cum Capital Withdrawal) option of its Nippon India Balanced Advantage Fund. This income distribution applies to both the regular and direct plans of the fund. The record date for this distribution is January 13, 2025.

Fund Overview

The Nippon India Balanced Advantage Fund operates as a hybrid fund, allocating investments between a mix of equity and equity-related instruments, debt, money market securities, and derivatives.  This strategy aims to provide a balance between growth and income.

Tax Implications 

Taxation varies depending on how long the investment is held. Gains from units sold after one year are taxed at a rate of 12.5% on amounts exceeding ₹1.25 lakh in a financial year, while gains up to ₹1.25 lakh are tax-free. If units are sold within a year, the entire gain is taxed at 20%. However, no tax is incurred while holding the units.

For dividends, these are added to the investor’s income and taxed according to the individual’s tax slab. If the dividend income surpasses ₹5,000 in a financial year, a 10% TDS is deducted by the fund house before distribution.

Understanding the IDCW Option

The IDCW option allows investors to receive periodic payouts from their investments, subject to the availability of distributable surplus. It is important for investors to ensure their holdings are aligned with the record date to benefit from such payouts.

Points to Note

Investors should verify their holdings and understand the implications of the IDCW option in terms of taxation and reinvestment, depending on their financial goals. The announcement is relevant for existing investors in the Nippon India Balanced Advantage Fund who have chosen the IDCW option, as they can expect to receive ₹0.20 per unit as income distribution.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Mutual Fund investments in the securities market are subject to market risks, read all the related documents carefully before investing.