Growth option is similar to Dividend reinvest option except tax implications. You need to consider long term capital gain tax while choosing growth option whereas you need to consider dividend distribution tax for dividend reinvest option. In absence of these taxes both of the options yield same returns.
One more important difference you observe is after the dividend ex-date in case of dividend reinvest option the number of units will be high whereas in case of growth option NAV will be high. However, investment amount will be same in both the cases.
NAV is separately calculated for dividend options and growth options.
Sathish Emmadi
Sathish Emmadi is a co-founder & editor at Lastbull.com. He is presently working in IT for one of the world’s top mutual fund companies. Handled multiple projects in BFSI (Banking,Financial Services and Insurance) domain. An Engineering Graduate from NITW.
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