'₹30 lakh salary vs ₹7 lakh annual dividend': CA explains what professionals should compare

For many professionals in India, a high salary is seen as the ultimate financial goal. But Chartered Accountant Nitin Kaushik argues that cash flow, stability, and taxation matter more than headline salary numbers.

In an analysis shared on X (formerly Twitter), Kaushik wrote: "Everyone chases big salaries. Few chase real cash flow. Here's the truth." He compared a ₹30 lakh annual salary package with a ₹7 lakh annual dividend income.

A ₹30 lakh per annum salary translates to about ₹2.5 lakh a month before taxes and deductions. After income tax, provident fund, and other statutory cuts, the take-home is closer to ₹1.7–1.8 lakh. While predictable, this income is directly tied to employment, equated monthly instalments (EMIs), and workplace pressures.

On the other hand, a ₹7 lakh dividend income yields roughly ₹58,000 a month. After taxation at slab rates — which can go as high as 35.88% — the investor actually receives about ₹33,000–38,000. The advantage: this cash flow is entirely passive, though it depends on the profitability of the company and its willingness to declare payouts.

Kaushik highlighted three key realities about income in India in 2025 — Dividends are no longer tax-free and are taxed at the individual’s income slab; Salaries allow deductions such as House Rent Allowance (HRA), National Pension System (NPS) contributions, and a standard ₹50,000 deduction, while dividends do not; and both income types carry risks — the risk of job loss in the case of salary, and the risk of reduced or cancelled payouts in the case of dividends.

“Don't compare just numbers. Compare freedom, stability, and tax impact,” Kaushik noted. CA Kaushik said that the smart financial strategy is to diversify income streams — combining salary with dividends, rental income, and systematic investment plans (SIPs).