Dividend, explained
A dividend is a share of a company’s profits paid to shareholders, usually in cash and per share held. A ₹5 dividend on 100 shares pays you ₹500. Not all companies pay dividends — many growth firms reinvest profits instead.
The key dates
To receive a dividend you must own the shares before the ex-dividend date. The record date fixes who’s eligible; buy on or after the ex-date and you miss that payout.
Dividend yield
The dividend yield expresses the annual dividend as a percentage of the price — use our dividend yield calculator. A very high yield can be a red flag; check the payout ratio and sustainability.
Tax on dividends
Dividends are taxable in your hands at your slab rate, and TDS may be deducted above a threshold. You can reinvest dividends to compound your holding over time.
Frequently asked questions
How do dividends work?
A company pays a portion of its profits to shareholders, per share held. You must own the shares before the ex-dividend date to receive the payout.
Do all stocks pay dividends?
No — many growth companies reinvest profits instead of paying dividends. Dividends are more common among mature, cash-generating firms.
Are dividends taxed?
Yes, dividends are taxable at your income-tax slab, and TDS may be deducted above a threshold.