Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Dividend is a portion of company profits distributed to shareholders, or a payout from mutual fund accumulated gains to unitholders.
Dividends are cash payments companies or funds give you from their profits — like a share of the earnings pie.
Equity dividends taxed in shareholders' hands per Finance Act rules. Mutual fund IDCW (formerly dividend) option pays from NAV, reducing unit value. Growth option reinvests internally, avoiding payout tax friction and supporting compounding.
Holding 500 shares with ₹8 dividend per share receives ₹4,000 annually. A mutual fund dividend of ₹2 per unit on 1,000 units pays ₹2,000 while NAV drops correspondingly.
Growth reinvests for compounding. IDCW pays out periodically. For long goals, growth option usually suits tax efficiency and compounding.
No. Stock dividends come from company cash. MF dividends come from your own NAV. Total return matters, not payout alone.
Some companies offer stock dividends or MF dividend reinvestment plans that purchase additional units/shares automatically.