Dividend Dates in India Explained: A Beginner’s Guide to Ex-Dividend, Record, and Payment Dates

I bought shares of a company last month because they announced a dividend. But I didn’t receive anything in my account. What went wrong?

If you’ve ever asked this question, you’re not alone.

Understanding dividend dates in India is one of the most overlooked but crucial parts of making money from your investments.

This guide is designed to walk you through how dividend payouts work in India, especially focusing on four important dates: declaration date, ex-dividend date, record date, and payment date.

We’ll keep it simple, relatable, and fully tailored to Indian investors like you.

What Are Dividend Dates and Why Should You Care?

Dividend dates are key events that decide whether or not you will receive a dividend from a company.

Many investors buy a stock just after the company announces a dividend—but miss out because they didn’t understand these dates. If you want your fair share of profits, timing is everything.

For Example, A freelance video editor from Bangalore buys 200 shares of a listed IT firm. The company declares a dividend of ₹10 per share. Whether she gets ₹2,000 depends entirely on when she buys those shares.

The Four Important Dividend Dates Explained for Indian Investors

1. Declaration Date

This is when the company officially announces the dividend. They disclose:

• Dividend amount (e.g., ₹10 per share)
• Record date
• Ex-dividend date
• Payment date

This is your signal to start tracking that stock if you’re interested in the dividend.

Example: On July 1, a mobile repair shop owner in Pune reads that a listed company has declared a ₹10 dividend per share. He makes a note of the dates announced. To get the dividend, he should look for an Ex-dividend date.

2. Ex-Dividend Date

This is the cut-off date. If you buy shares on or after this date, you will not receive the dividend.

Due to India’s T+1 settlement cycle, you must buy the stock at least one business day before the ex-dividend date for your name to appear in company records (shareholders register).

Example: A tuition teacher in Bhopal sees the ex-dividend date is July 10. She buys the shares on July 9 to qualify.

The stock price usually drops by about the same amount as the dividend on the ex-dividend date. It’s a natural market adjustment.

3. Record Date

This is the day the company checks its books to see who owns the shares. Only those listed will receive the dividend.

Even if you buy the shares on the record date, you won’t be eligible. Your name appears in records one business day after purchase.

Example: A home baker from Ahmedabad buys shares on July 8. Record date is July 10. She qualifies because her name appears on the list by the record date.

4. Payment Date

This is the day the dividend is actually credited to your bank or brokerage account.

Don’t worry if you don’t see the money right after the record date. Payment usually happens a few days or even weeks later.

How T+1 Settlement Affects Dividend Eligibility

What is T+1? If you buy a share today (T), it gets officially registered in your name the next business day (T+1).

To get the dividend, your name must be on the company’s list by the record date. So, you need to buy before the ex-dividend date.

You can sell the shares on or after the ex-dividend date and still receive the dividend.

Summary of the Four Dividend Dates

To fully understand how dividends work, you need to remember all four important dates. Let’s recap them with a simple, real-life example for better clarity.

Example 1:

Imagine you are a freelance wedding photographer from Lucknow who’s invested in 1,000 shares of a reputed FMCG company. The company declares a ₹10 per share dividend.

Here’s how the timeline would look:

Table: Full Dividend Cycle Example

Example 2:

Let’s say a mobile repair shop owner from Nagpur buys 100 shares of a company at ₹500 each. That company declares a ₹10 dividend per share on July 1.

If the shop owner buys shares on July 10 or later, they won’t get the ₹1,000.

The term “ex-dividend” simply means “without dividend.” On this day, the stock starts trading without the right to receive the upcoming dividend.

Step-by-Step: How to Earn Dividends Successfully

• Track Announcements: Use broker apps or check the company’s website.
• Note Down the Dates: Especially the ex-dividend and record dates.
• Buy the Stock: At least one business day before the ex-dividend date.
• Hold the Stock Through the Record Date: You can sell it later without losing the dividend.
• Receive Payment: It will be credited on the payment date.

Even if you reinvest your dividend into buying more shares (called a Dividend Reinvestment Plan, or DRIP), the income is still taxable in India under the “Income from Other Sources” head.

Taxation on Dividends in India

Whether you’re a salaried individual, freelancer, mobile shop owner, or local cafe operator investing in stocks, it’s important to understand how dividend income is taxed in India.

Are Dividends Taxable? Yes.

• Tax Head: “Income from Other Sources”
• Rate: Taxed as per your income slab

As per current Indian tax laws (post April 1, 2020), all dividend income is taxable in the hands of the shareholder.

Dividends fall under the head of “Income from Other Sources” in your Income Tax Return (ITR). They are added to your total income and taxed as per your applicable income slab and tax rates.

Example:

Let’s say you’re a self-employed graphic designer earning ₹6,00,000 a year. You also receive ₹10,000 as dividend income in a financial year.

Now, your total taxable income is ₹6,10,000—and that dividend gets taxed under the head “Income from Other Sources” along with your salary or business income.

TDS Rules:

If your total dividend income from a company exceeds ₹5,000 in a financial year, that company (or its registrar) may deduct 10% TDS before paying you.

Key Points:

• Below ₹5,000: No TDS
• Above ₹5,000: 10% TDS is deducted
• No PAN linked? TDS goes up to 20%

How to Claim TDS Credit?

If TDS is deducted, you’ll see it in Form 26AS or AIS (Annual Information Statement) showing how much tax has already been paid on your behalf. You can adjust this while filing your Income Tax Return (ITR).

Example:

You’re a tuition teacher in Surat and receive ₹8,000 as dividend from two companies. Each deducts ₹800 as TDS (₹400 each). While filing your Income Tax Return (ITR), you can show this ₹800 as already paid and reduce your final tax bill.

Always link your PAN with your Demat account and bank account to avoid higher TDS (20%). Also, verify TDS deductions in your Form 26AS or AIS every quarter.

Dividends can be a simple way to earn regular passive income from your stock investments—especially if you’re not a full-time trader. 

But you need to understand how dividend dates work, plan your buying and selling carefully, and stay compliant with Indian tax rules.

Whether you’re a small business owner or just starting out with investing, keeping this knowledge handy will ensure you never miss a dividend you rightfully earned.

• If dividend income > ₹5,000/year from a company: 10% TDS is deducted
• If PAN not linked: 20% TDS

Check Form 26AS or AIS to see how much TDS was deducted. Adjust it while filing your ITR.

Conclusion: Take Charge of Your Dividend Strategy

Understanding dividend dates in India is not just about timing your trades—it’s about making informed financial decisions. Whether you’re a freelancer, small business owner, or someone managing family savings, knowing when to buy or sell for dividends can boost your passive income over time.

With this guide, you now have clarity on declaration, ex-dividend, record, and payment dates. You also understand how to plan your trades smartly, avoid common pitfalls, and handle dividend-related taxes.

Keep this knowledge handy, act early, and always double-check the dates on your broker’s platform. Every smart step you take adds to your financial growth and confidence.

Also Read:

• Dividend Per Share (DPS): Definition, Formula & Importance for Investors
• Effects of Dividends, Bonus Issue, Stock Splits, Buybacks and Rights Issues on Stock Prices
• Beginner’s Guide to Investing in Dividend Stocks
• Earnings Per Share vs Dividends Per Share

Frequently Asked Questions About Dividend Dates for Beginners in India

Many beginners in India—whether salaried professionals, small business owners, or students—have questions when they first hear terms like ex-dividend date, record date, or payment date.

This FAQ section answers the most common beginner questions in simple, everyday language. 

Go ahead—explore these answers at your own pace. By the end, you’ll feel more confident and informed when checking dividend details on stocks you invest in.

What does “ex-dividend date” mean, and why is it important?

The ex-dividend date is the last day you must own a stock to get the dividend. If you buy the stock on or after this date, you won’t receive the upcoming dividend.

Example: If a company announces a ₹20 dividend with an ex-dividend date of July 18, you need to buy the shares on or before July 17. Buying on July 18 or later means you’ll miss the dividend.

Can I get a dividend if I buy shares on the record date?

No, buying shares on the record date is too late. You need to buy them before the ex-dividend date, which comes one business day earlier.

This is because of India’s T+1 settlement rule, which means your name appears in the company’s records one day after you buy. If the record date is July 20, you should have bought the stock by July 18 to be eligible.

Do I need to hold the stock until the dividend is paid?

No, you can sell the stock on or after the ex-dividend date and still get the dividend.

Example: A homemaker in Chennai buys a listed company’s shares on July 10. The ex-date is July 15. If she sells her shares on July 16, she’ll still receive the dividend because she was eligible as of the record date.

Why does the stock price drop on the ex-dividend date?

On the ex-dividend date, the stock price usually falls by about the same amount as the dividend. This is because the company is paying part of its profits to shareholders, so its value drops slightly.

Example: If a stock was ₹1,000 and announces a ₹20 dividend, the price may drop to around ₹980 on the ex-date. This is normal and expected in the market.

Are dividends taxable in India? Will I have to pay tax if I receive them?

Yes, dividends are taxable in India. They are added to your income and taxed according to your income tax slab.

Also, if you receive more than ₹5,000 in dividend income from one company in a financial year, 10% TDS (Tax Deducted at Source) may be applied before the money reaches your account. You can see this TDS in your Form 26AS and AIS when you file your ITR.

Will I Get a Dividend If I Buy Shares on the Record Date?

No. You must buy the shares at least one business day before the ex-dividend date, which itself comes before the record date.

Because of India’s T+1 settlement cycle, your name appears in the company’s books one day after your purchase. Buying on the record date is too late.

What Happens If I Buy Shares on or after the Ex-Dividend Date?

You will not receive the dividend. Instead, the seller will get it, because their name was already on the company’s record books as of the record date.

Can I Sell My Shares on the Record Date and Still Receive the Dividend?

Yes. If you sell the stock on or after the ex-dividend date, you’ll still receive the dividend—even if someone else now owns the shares.

How Long Do I Need to Hold a Stock to Get a Dividend?

Just until the ex-dividend date. You can sell the stock on the ex-dividend date or later and still receive the payout.

Why Does the Stock Price Drop on the Ex-Dividend Date?

Because the company is giving out part of its profits, the stock’s value goes down by approximately the dividend amount.

Example:

• Share price before: ₹540
• Dividend declared: ₹15
• Expected price on ex-date: Around ₹525

This is a normal market adjustment.

Do I Have to Pay Tax on Dividends in India?

Yes. As per Indian tax law, dividends are taxed in the hands of the investor under “Income from Other Sources”.

• If your total dividend income exceeds ₹5,000 in a year from a company, TDS (Tax Deducted at Source) at 10% may apply.
• You must declare dividend income in your ITR (Income Tax Return).

To avoid confusion, always check dividend dates and T+1 settlement rules on your broker’s app before buying shares for dividend income.