Growth or Dividend Re-Invest option?

[mohnish_khiani]

I am a very long term investor and understand the difference between the Growth option and the Dividend Re-Invest option,but I am not able to calculate the which option from the above two would be better returns generating option among the two.I am seeing this only from the point of view of returns.

 

[roshcrazy]

That shall depend on the tax slab you come in..if you are under the highest tax slab and you want better post tax returns than fd, you could consider investing in growth option(for investments greater than a year>>ltcg is 10% w/o indexation or 20% with indexation{whichever is lower] as now in this budget, ddt on all debt funds has been raised to 25% from 12.5%)

 

[praveen taneja]

query you replied is just One year old bro but still would be helpful to someoen if not him

 

[rvm123]

in my view there may be a very marginal difference under both the schemes. In dividend re-investment, at periodic intervals, you are getting returns and based on the tax rules, they are exempt. In growth option, suppose in a future date, if they mention that the increase over the purchase price has to be considered as capital gain, etc and if they charge tax on the appreciation, we may be at loss. So, in my view, dividend reinvestment seems to be the best.