Dividend Yield Calculator
Dividend investing is popular among those seeking passive income. This calculator shows your dividend yield, total annual and monthly income from dividends, tax liability (dividends are taxed at slab rate in India post-FY 2020-21), and the investment needed to hit a target monthly income.
Frequently Asked Questions
Is dividend income taxable in India?+
Yes — since FY 2020-21, dividends are taxed at your income tax slab rate (not the old DDT system). The company adds it to your income; if total dividend from a company exceeds ₹5,000, TDS at 10% is deducted. Declare all dividend income in ITR Schedule OS.
What is a good dividend yield?+
In India, a yield of 2–5% is considered reasonable for large-cap stocks. Above 6–7% may indicate either a high-dividend policy or a falling stock price (yield trap). Compare yield with FD rates: if a stock yields 5% but has growth potential, it often beats a 7% FD after capital gains consideration.
What is dividend yield trap?+
When a stock's price falls sharply, dividend yield appears high — but it may signal business deterioration. High yield alone doesn't make a good investment. Check: payout ratio (sustainable if <60%), earnings consistency, debt levels, and whether the dividend has been maintained across economic cycles.
How much do I need to invest for dividend income of ₹1 lakh/month?+
At a 3% yield: ₹4 crore investment needed. At 5% yield: ₹2.4 crore. At 6% yield: ₹2 crore. These are pre-tax numbers. Post-tax (30% slab), the required investment is ~43% higher. This is why dividend-only passive income requires substantial capital — supplement with growth assets.