Dividend

A Dividend is paid by companies (usually profitable ones) to shareholders as a way of sharing earnings. It is commonly associated with equity shares and is an important source of passive income for investors.

Dividends can be declared by the company’s board and are not guaranteed—they depend on profits, cash flow, and company policy.

Types of Dividends

• Cash Dividend: Paid in cash directly to shareholders
• Stock Dividend: Additional shares issued instead of cash
• Interim Dividend: Paid during the financial year
• Final Dividend: Declared at the end of the financial year

Key Points

• Paid to shareholders on record before the ex-dividend date
• Indicates financial health and profitability
• Often used by long-term investors for regular income

Taxation in India

Dividends are taxable in the hands of investors as per rules of the Income Tax Department of India.

"If a company declares a dividend of ₹5 per share and you hold 1,000 shares, you will receive ₹5,000 as dividend income."