Calculate the true yield on your dividend income — including TDS, income tax, and net post-tax return vs FD.
Which mutual fund option suits you better?
Dividend yield measures how much a company pays in dividends each year relative to its share price. In India, dividends received are taxable as income at your applicable slab rate, with 10% TDS deducted at source on dividends exceeding ₹5,000 per year from a single company.
Yes. Since FY 2020-21, dividends are taxed at your income tax slab rate. Additionally, companies deduct 10% TDS if your total dividend from that company exceeds ₹5,000 in a financial year.
A yield of 2–5% is considered healthy. Above 7% can be attractive but warrants investigation — high yields sometimes signal a falling share price. Compare against the 10-year bond yield (~7%) and FD rates (~7.2%) as benchmarks.
Growth option reinvests all returns and benefits from compounding. IDCW (dividend) option pays out periodically but this reduces NAV. For long-term wealth creation, growth option is generally better. IDCW makes sense for retirees needing regular income.
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