Should I switch to regular plan from dividend plan to start SWP

If you want to start SWP to get a regular income from your investments, you need not switch to growth option. SWP can be started from any plan / option. Therefore, you can start SWP from DSP Black rock opportunities fund Direct Plan Dividend pay.

You can start SWP now itself and need not wait for one year. But the gains made on each SWP before one year will be treated as short term capital gains and taxes payable will be @15%. However, if you start the SWP after 12 months, the gains made on each SWP will be totally tax free.

We suggest that you do not switch to growth option and remain invested in this fund/plan/option and start the SWP either now or after 12 months from the date of investment, based on your requirement of income needs.

However, if the fund declares dividend that would be additional receipt for you over and above the SWP amount. Please note that dividends received from mutual funds are also tax free.

Hope you find our suggestions helpful. Thanks for writing to Advisorkhoj.