What is Passive Income?
Passive income is money earned with minimal effort, typically from investments like dividend-paying stocks or Real Estate Investment Trusts (REITs). It provides financial freedom, supplements earnings, and hedges against market volatility.

Why Dividends & REITs?

Step 1: Invest in Dividend Stocks
Top Dividend Stocks in India (2024):

How to Start:

1. Use platforms like Zerodha or Groww to buy shares.
2. Reinvest dividends via Dividend Reinvestment Plans (DRIPs).

Step 2: Add REITs for Rental Income
REITs let you invest in income-generating properties (malls, offices) without buying physical real estate.

Top REITs in India (2024):

How to Invest:

1. Buy REIT units via your Demat account (e.g., Embassy REIT ticker: RELIANCE).
2. Hold long-term for compounding and tax benefits.

Step 3: Build a Balanced Portfolio

Sample Allocation for ₹10L Investment:

Tax Rules in India:

• Dividends: Taxed as income at slab rates (TDS 10% if dividend >₹5,000/year).
• REIT Dividends: Taxed as income; LTCG on units held >3 years taxed at 20% with indexation.

Tax-Saving Tip: Hold dividend stocks/REITs for >1 year to qualify for lower LTCG rates.

FAQs:

1. How to choose dividend stocks?
   Look for consistent payout history (e.g., ITC’s 25+ years of dividends) and low debt (<1 Debt/Equity).

2. Are REITs safe in India?
   Yes! SEBI-regulated REITs (e.g., Embassy, Mindspace) have high occupancy rates (>90%) and lease agreements.

3. Can I earn monthly income from dividends?
   Yes! Stocks like Hindustan Zinc and REITs like Embassy pay quarterly/semi-annual dividends.

Action Steps for you:

1. Screen Dividend Stocks: Use Screener.in to filter companies with >5% yield and 10-year payout history.
2. Buy Your First REIT: Start with ₹5,000 in Embassy REIT via Zerodha/Groww.
3. Automate Investments: Set up SIPs in dividend-focused mutual funds (e.g., ICICI Pru Dividend Yield Fund).

Key Takeaways:

• Start Early: Compounding boosts passive income over time (e.g., ₹10L at 7% yield = ₹70,000/year).
• Diversify: Mix sectors (FMCG, utilities, REITs) to reduce risk.
• Reinvest: Use dividends to buy more shares for exponential growth.

Click on below Links to learn more:

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