Why are the returns on liquid ETFs like Liquid bees, DSP Liquid ETF, and ICICI Liquid ETF lesser than the returns shown on their websites?

This is because the advertised returns are based on the yield of the underlying assets, like money market instruments and short-term debt securities, which can fluctuate depending on interest rates and other economic factors. In addition, liquid ETFs often have management fees and other expenses that can eat into their returns. It's important to consider the total return, which includes both yield and price appreciation, when evaluating a liquid ETF.

Liquid ETFs paid a Dividend Distribution Tax (DDT) of 28.84% on their returns prior to the 2020 budget. After the DDT was subtracted, the dividends were paid to investors. The DDT, however, was not taken into consideration in the historical results shown on their websites.

The DDT was abolished after the budget, and as a result, dividends from liquid ETFs are now taxable at the investor's individual income tax slab rate. A 10% extra Tax Deducted at Source (TDS) is applied if the dividends exceed 5,000.