Income Distribution cum Capital Withdrawal (IDCW) in mutual funds

Mon, 18 May 2026 00:00:00 +0000

IDCW stands for Income Distribution cum Capital Withdrawal, the option name SEBI mandated in April 2021 to replace the older “dividend option” terminology in Indian mutual funds. The IDCW option of a mutual fund scheme periodically distributes a portion of the scheme’s NAV to unitholders as cash, with the NAV correspondingly reduced after each distribution. The rebranding from “dividend” to “IDCW” was intended to correct a longstanding retail misconception that mutual fund dividends were “free” earnings akin to corporate dividends, when in fact they are partly distributions from the unitholder’s own capital.

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Income Distribution cum Capital Withdrawal (IDCW) in mutual funds