Taxablity on dividend Mututal Fund

For Individual and HUF

From	Dividend Exempt u/s	Long Term Capital Gain Exempt U/s	Short Term Capital Gain Exempt U/s
Company	10(34) Dividend from company are lower as they are subject to DDT @ 15% u/s115-O	10(38)	@15%
Equity Oriented Mutual Fund (Min 65% investment in equity)	10(35)(a)	10(38)	@15%
Debt Oriented Mutual Fund	10(35)(a) Dividend from Debt oriented Mutual Funds are lower as they are subject to DDT @ 28.33% u/s115R	@ 20% Indexation benefit available	As per Tax slab (For NRI it is 30%)

From a tax point of view, taking a dividend reinvestment option is no different from receiving the dividend in your bank account and then making a fresh investment of the same.