Archive · 6 Sep 2025
Dividend Option Gains Popularity with Mutual Fund Investors
Some people who invest in mutual funds are choosing to receive dividends again.
This is because the government allows people to earn up to ₹12 lakh without paying taxes.
The dividend option gives investors money regularly.
Before, the government taxed the money that mutual funds gave out as dividends, but now investors pay the tax based on their income.
Experts say that those who need money now and stay within the ₹12 lakh limit might prefer the dividend option.
However, for some, systematic withdrawals could be better because dividends are not guaranteed.
Investors are choosing dividend options for income tax relief.
The ₹12 lakh income tax exemption under the new tax regime is a key factor.
Dividends provide regular income, unlike relying solely on capital gains.
Mutual funds reduce their net asset value when distributing dividends.
Experts note the renewed interest from retirees and those seeking regular income.
- Who
- Mutual fund investors
- What
- Dividend options are gaining traction.
- When
- Recently, following Budget provisions
- Where
- N/A
- Why
- Income tax relief and regular income needs
- Tax Relief
- ₹12 lakh exemption under new tax regime
- Investor Focus
- Mid-level employees, pensioners
- Option Appeal
- Regular income vs. capital appreciation
- Dividend Impact
- NAV decreases with dividend payout