Costs, Tax & Regulation
Growth vs IDCW Option
Reinvest gains or receive payouts — and how each is taxed.
Updated 27 September 2026 · SEBI rules as of 2026
Growth
No payouts; tax only on redemption
Costs, Tax & RegulationOverview
In the growth option, gains stay invested and compound. In the IDCW (Income Distribution cum Capital Withdrawal) option, the scheme periodically pays out part of NAV — which is your own money — and the payout is taxed at slab rate.
| Particular | Details |
|---|---|
| Growth | No payouts; tax only on redemption |
| IDCW payout | Taxed at slab; TDS 10% above ₹10,000 per AMC per FY |
| IDCW reinvest | Taxed at slab even though reinvested |
Comparison
| Factor | Growth | IDCW |
|---|---|---|
| Compounding | Full | Reduced |
| Tax | On redemption (capital gains) | Every payout at slab |
| Cash flow | Use SWP | Irregular payouts |
Frequently asked questions
Is IDCW guaranteed?
No — amount and frequency are at the AMC’s discretion.
Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Information is educational and may change with SEBI / tax rules — verify with the AMC, AMFI or SEBI. FinancePortal is not an investment adviser.