The returns you receive from liquid ETFs like Liquidbees, DSP Liquid ETF, and ICICI Liquid ETF may be lower than the returns displayed on their websites due to tax implications that are not reflected in their historical data.
Historical tax impact (before 2020)
Prior to the 2020 budget, liquid ETFs incurred a Dividend Distribution Tax (DDT) of 28.84% on their returns. The dividends were distributed to you after deducting the DDT. However, the historical returns displayed on their websites did not account for this DDT deduction.
Current tax structure (after 2020)
The DDT has been eliminated, and dividends from liquid ETFs are now subject to taxation based on your individual income tax slab rate. If your dividends exceed ₹5,000, an additional Tax Deducted at Source (TDS) of 10% is applicable.
Learn more about liquid ETFs and Liquid BeES at tradingqna.com/t/everything-you-need-to-know-about-liquidbees-and-liquid-exchange-traded-funds-etfs/53116.