Dividend Investing — Build Passive Income
Dividend investing is a strategy where you buy stocks or funds that pay regular dividends, creating a stream of passive income alongside capital appreciation.
How Dividends Work
Companies distribute a portion of their profits to shareholders as dividends — usually quarterly. Dividend yield = Annual Dividend / Stock Price × 100.
Dividend Yield vs Growth
High-yield stocks (4-8%) provide income but may grow slowly. Growth stocks reinvest profits for appreciation. A balanced approach targets 2-4% yield with moderate growth.
Tax on Dividends in India
Dividends are taxed at your income tax slab rate. TDS of 10% is deducted if dividend exceeds ₹5,000/year from a company.