What’s new in Parag Parikh Flexi Cap Fund? Should you consider the IDCW option?

Parag Parikh Flexi Cap Fund is introducing a new investment option, IDCW (Income Distribution cum Capital Withdrawal), effective 31st October 2025. This is the only change to the scheme’s structure. The fund house informed its unitholders about this change through a notice cum addendum

The IDCW option includes two facilities:

⦁ Payout of IDCW

⦁ Re-investment of IDCW

This is not a mandatory change; it's entirely optional, and existing investors may continue with the growth option if they prefer.

Should you consider the IDCW option in Parag Parikh Flexi Cap Fund?

According to Balwant Jain, a Mumbai-based tax and investment expert, "Growth option is generally more advisable unless you specifically need regular income." He adds, "Dividends under IDCW are taxed at slab rates, while capital gains under the Growth option enjoy a lower tax rate, making it more efficient for most investors."

However, the IDCW option also involves more frequent accounting and tax reporting, especially if payouts are regular.

⦁ The trustees of the mutual fund decide how much IDCW will be paid and fix a record date, depending on whether there’s enough distributable surplus (i.e., profit available for distribution).

⦁ Within one calendar day of this decision, the Asset Management Company (AMC) must publish a notice to inform the public.

⦁ This notice must appear in at least one English newspaper or a local language newspaper where the mutual fund’s head office is located.

⦁ The record date will be 2 working days after the publication.

⦁ The public notice must clearly state that after the IDCW is paid, the NAV (Net Asset Value) of the scheme will drop by the amount of the payout and any statutory taxes or levies (if applicable).

⦁ The NAV will be officially adjusted to reflect the IDCW payout at the close of business hours on the record date.

⦁ The fund cannot make any announcements or hints about potential IDCW payouts before the public notice is officially published.

⦁ If you have opted for an IDCW plan with monthly or more frequent payouts, the fund does not need to publish a notice each time.

A flexible equity fund that invests across large-cap, mid-cap, and small-cap companies. This fund is designed for investors who are looking to build long-term wealth through an actively managed portfolio. It primarily invests in Indian and international equities, offering diversification across geographies and market caps. The aim is to deliver long-term capital growth.