Why are the returns on liquid ETFs like Liquidbees, DSP Liquid ETF, and ICICI Liquid ETF lesser than the returns displayed on their websites?
Prior to the 2020 budget, liquid ETFs incurred a Dividend Distribution Tax (DDT) of 28.84% on their returns. The dividends were distributed to investors after deducting the DDT. However, the historical returns displayed on their websites did not account for the DDT.
After the budget, the DDT was eliminated, and dividends from liquid ETFs are now subject to taxation based on the investor's individual income tax slab rate. If the dividends exceed ₹5,000, an additional Tax Deducted at Source (TDS) of 10% is applicable.
To learn more about Liquid ETFs and Liquid BeES, visit tradingqna.com/t/everything-you-need-to-know-about-liquidbees-and-liquid-exchange-traded-funds-etfs/53116.