Dividend Reinvestment Calculator

What is Dividend Reinvestment (DRIP)?

A Dividend Reinvestment Plan (DRIP) is a strategy where an investor uses their cash dividends to purchase additional shares of the same company. In the Indian market, while many companies don't offer formal DRIP programs, investors can manually reinvest their dividends to achieve a similar compounding effect.

The Compounding "Magic" of Dividends

When you reinvest dividends, you are not just earning on your initial capital, but also on the dividends earned in previous years. Over a 10-20 year period, the dividends from a high-quality, dividend-growing company can eventually exceed your original annual investment.

Taxation of Dividends in India

As per the current Indian Income Tax rules:

• Taxability: Dividends are added to your total income and taxed at your applicable slab rate.
• TDS: Companies deduct 10% TDS (Tax Deducted at Source) if the total dividend paid to an individual exceeds ₹5,000 in a financial year.