8.18What is the IDCW option?
1What is it?
IDCW (Income Distribution cum Capital Withdrawal), earlier called the "dividend option", pays out part of the fund’s money to you from time to time.
2Why does it exist?
Some investors want periodic cash. But the payout comes out of your own NAV (it is not extra money) and is taxed at your slab rate.
3Quick revision
- Periodic payouts from NAV.
- Not extra income; NAV falls by the payout.
- Taxed at slab.
4Knowledge check
Q1. What does IDCW stand for?Show answer
Income Distribution cum Capital Withdrawal.
Q2. Is an IDCW payout a bonus on top of returns?Show answer
No, it comes from your own NAV.
Q3. How is IDCW taxed?Show answer
At your income tax slab.
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