How to decide between growth option and IDCW option (mutual fund)

Tue, 19 May 2026 00:00:00 +0000

The Growth vs IDCW option (the latter formerly called “dividend option” until SEBI’s terminology revision in 2021) determines whether your mutual fund returns are reinvested in the NAV or paid out periodically as cash. The post-Finance Act 2020 tax change made the decision substantially in favour of Growth for most investors.

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with any AMC or distributor. No affiliate commission is earned from option selection. For complex tax situations, consult a Chartered Accountant before filing.

Growth option vs IDCW option in mutual funds

Tue, 12 May 2026 00:00:00 +0000

Every open-ended mutual fund scheme in India offers at least two investment options: the growth option and the IDCW (Income Distribution cum Capital Withdrawal) option. Each option maintains a separate NAV and represents a different mechanism for the investor to receive value from the scheme’s portfolio performance, though both options invest in an identical underlying portfolio managed by the same fund manager.

The choice between growth and IDCW is one of the most consequential structural decisions for a mutual fund investor, primarily because of its tax implications.

IDCW Option on WebNotes

How to decide between growth option and IDCW option (mutual fund)

Growth option vs IDCW option in mutual funds