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Compare post-tax outcomes for growth and dividend options using the same investment assumptions.
Same investment, compared across both options.
Add the post-tax dividend back into the corpus each year.
In the growth option, returns stay invested and compound until you redeem, so tax applies only once on the gains at exit.
In the dividend (IDCW) option, the fund pays out part of the value periodically. Those payouts are taxed at your income slab in the year received, which usually reduces long-term compounding.
In the growth option, gains stay invested and compound until you redeem. In the dividend (IDCW) option, the fund periodically pays out part of the value as dividends, which are taxed in the year received at your income slab.