Are you looking for the top 10 best dividend paying stocks in India? Then, you have landed on the right place.
High dividend paying stocks in India have gained significant attention as a reliable way to earn passive income.
Dividends are distributed profits paid by a company to its shareholders, and when selected wisely, dividend stocks can be a stable source of income over the long term.
Below, we’ll explore the basics of dividend stocks and present the best dividend paying stocks in India in 2025.
Table of Contents
What is a Dividend?
A dividend is a portion of a company’s earnings that is distributed to shareholders as a reward for their investment.
When a company generates profit, it can reinvest the funds into the business or share a portion with its investors.
Dividends are usually paid on a per-share basis, and they can be distributed quarterly, semi-annually, or annually.
The dividend yield represents the return on investment from dividends, calculated as the dividend amount divided by the stock price, typically expressed as a percentage.
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What are High Dividend Paying Stocks?
High dividend-paying stocks are those that consistently distribute higher-than-average dividends.
Companies with high dividends are often well-established and stable, providing a steady cash flow to investors.
While high dividend yields can be appealing, it’s important to analyze a company’s overall financial health, as unsustainably high dividends could indicate instability.
Which Sectors Offer the Highest Dividend Paying Stocks In India?
Industries with established, cash-rich companies often provide high dividend payouts.
In India, the highest dividend-paying stocks are often found in the energy, utilities, oil and gas, and public sector enterprises (PSUs).
These companies have strong government backing and stable earnings, allowing them to offer reliable dividends.
Why Invest in the Most Dividend Paying Stocks in India?
Investing in high dividend-paying stocks offers several benefits:
• Stable Passive Income: Dividends provide a steady source of income, ideal for long-term investors.
• Hedge Against Market Volatility: High dividend stocks can help stabilize portfolios during market downturns.
• Compounding Growth: Reinvesting dividends through a dividend reinvestment plan (DRIP) can help accumulate more shares and boost returns over time.
Criteria for Selecting High Dividend Paying Stocks
To select high dividend-paying stocks, look for:
• Dividend Yield: Consistent and substantial dividend yield.
• Financial Stability: Companies with strong cash flow and stable earnings.
• Dividend History: Regular dividend payments over several years.
• Low Payout Ratio: A manageable dividend payout ratio, suggesting the dividend is sustainable.
Top 10 Best Dividend Paying Stocks in India (2025)
The Top 10 Best Dividend Paying Stocks in India for 2025 offer investors a prime opportunity to earn consistent income while benefiting from the stability of some of India’s most reliable companies.
Leading this list are well-established firms like Oil and Natural Gas Corporation (ONGC), Vedanta Limited, and Bharat Petroleum Corporation Limited (BPCL), each known for high dividend yields in sectors like energy and metals.
Companies such as Coal India and Hindustan Zinc also stand out, supported by steady demand and government backing, making them popular among income-focused investors.
In the tech and finance sectors, HCL Technologies, REC Limited, and Power Finance Corporation offer additional avenues for regular dividends.
These stocks are sought after for their combination of strong financials, government affiliations, and industry-leading performance, presenting solid options for building a robust, income-generating portfolio in 2025.
Let’s explore the top 10 best dividend paying stocks in India with their current dividend yields:
1. Chennai Petroleum Corporation Limited (CHENNPETRO) – 8.81%
Chennai petroleum corporation limited, is another one of the top best dividend paying stocks in india.
Chennai Petroleum, a smaller but efficient player in oil refining, provides a notable dividend yield of 8.81%.
It is known for its regional dominance and steady operations, which allow it to offer substantial dividends, making it a good option in the energy sector.
2. Vedanta Limited (VEDL) – 6.13%
Vedanta Limited ranks among the top high-paying dividend stocks in India.
Known for its generous dividend yield of 6.13%, Vedanta appeals to investors looking for steady income from the commodities sector.
The company’s operations span zinc, copper, iron ore, and aluminum, all of which contribute to its profitability and ability to distribute high dividends.
3. Bharat Petroleum Corporation Limited (BPCL) – 6.66%
BPCL Is another India’s best high Dividend paying Stocks.
BPCL is leading oil and gas company, is well-regarded for its reliable dividend payments, offering a 6.66% yield.
As a government-owned entity, BPCL benefits from policy support, ensuring stable earnings and regular dividend distributions.
It’s a solid choice for investors seeking income from the energy sector.
4. Hindustan Petroleum Corporation Limited (HINDPETRO) – 5.49%
HINDPETRO, a subsidiary of ONGC, has a strong position in refining and distribution.
With a 5.49% dividend yield, it’s a favorite among those looking for high dividend-paying stocks in India backed by government stability.
5. Oil and Natural Gas Corporation (ONGC) – 4.67%
Leading the list of top 10 best dividend-paying stocks in India, ONGC is one of India’s leading public sector companies in the oil and gas sector, playing a critical role in the country’s energy landscape.
With a high dividend yield of 4.67%, it is popular among income-focused investors.
ONGC has a robust track record of earnings, thanks to its extensive operations in exploration, development, and production of oil and natural gas.
The company’s consistent dividend payments reflect its commitment to returning value to shareholders while benefiting from government support and favorable industry demand.
With government backing, its dividend yields remain attractive, making it a popular choice for income-focused investors.
6. Coal India Limited (COALINDIA) – 6.02%
As the top coal producer in India, Coal India offers a dividend yield of 6.02%, making it one of the best high dividend-paying stocks in the mining sector.
The company’s robust profits and government ownership make it a reliable source of dividend income.
7. HCL Technologies Limited (HCLTECH) – 3.08%
HCL Technologies is unique among tech companies, offering a dividend yield of 3.08%.
Its consistent growth in IT services has enabled it to become a top dividend-paying stock for those interested in the tech sector.
HCL provides both growth potential and reliable income.
8. Hindustan Zinc Limited (HINDZINC) – 2.57%
Hindustan Zinc, a major producer of zinc in India, offers a dividend yield of 2.57%.
Its strong earnings and demand for zinc have helped it become one of the preferred high dividend-paying stocks in India, particularly in the metals industry.
9. REC Limited (RECLTD) – 3.11%
REC, a public sector financial company focused on power project financing, offers a 3.11% dividend yield.
It stands out as one of the top dividend-paying stocks in India’s finance sector.
Investors value REC’s stability and its consistent dividend payouts.
10. Power Finance Corporation Limited (PFC) – 3.00%
With a dividend yield of 3.00%, PFC is a popular choice for income-focused investors in India.
As a government-backed financial institution financing power projects, PFC remains a consistent performer among the top high dividend-paying stocks, offering regular dividends with lower risk.
Top 10 High Dividend paying Stocks Companies List
| Sr. No | Company Name | Dividend Yield (%) | Sector |
|---|---|---|---|
| 1 | Chennai Petroleum Corporation Limited (CHENNPETRO) | 8.81% | Energy |
| 2 | Vedanta Limited (VEDL) | 6.13% | Commodities |
| 3 | Bharat Petroleum Corporation Limited (BPCL) | 6.66% | Energy |
| 4 | Hindustan Petroleum Corporation Limited (HINDPETRO) | 5.49% | Energy |
| 5 | Oil and Natural Gas Corporation (ONGC) | 4.67% | Energy |
| 6 | Coal India Limited (COALINDIA) | 6.02% | Mining |
| 7 | HCL Technologies Limited (HCLTECH) | 3.08% | Technology |
| 8 | Hindustan Zinc Limited (HINDZINC) | 2.57% | Metals |
| 9 | REC Limited (RECLTD) | 3.11% | Finance |
| 10 | Power Finance Corporation Limited (PFC) | 3.00% | Finance |
Risks Associated with High Dividend Stocks
While high dividend stocks are attractive, they come with risks:
• Dividend Cuts: If a company’s profits fall, it may reduce or eliminate dividends, impacting income.
• Interest Rate Sensitivity: Rising interest rates can make dividend stocks less appealing, lowering their prices.
• Economic Downturns: During recessions, even high dividend companies may struggle, leading to lower payouts.
Taxation on Dividends in India
According to Section 194 of the Income Tax Act, Tax Deducted at Source (TDS) is applicable on dividends that are distributed, declared, or paid on or after April 1, 2020.
Indian companies are required to withhold a 10% tax on dividends given to resident shareholders if the total dividend amount exceeds Rs. 5,000 in a financial year. This deduction is tracked using the shareholder’s PAN.
How to Invest in High Dividend-Paying Stocks?
Investing in high dividend-paying stocks is simple:
• Stock Brokers: Open a Demat and trading account with a stock broker and buy these stocks directly.
• Mutual Funds and ETFs: Dividend-focused mutual funds and ETFs allow investors to gain exposure to high dividend-paying stocks.
• DRIP (Dividend Reinvestment Plan): Reinvest dividends to accumulate more shares and maximize returns.
High dividend-paying stocks in India are an excellent choice for passive income and long-term growth.
With careful selection, these stocks can enhance your portfolio’s stability and generate consistent returns.
Conclusion:
In conclusion, high dividend-yielding stocks in India offer a reliable avenue for investors seeking steady income and potential for long-term growth.
By carefully selecting stocks with stable financials, consistent dividend histories, and robust yields, investors can build a portfolio that not only generates passive income but also adds stability during market fluctuations.
However, it’s crucial to understand the risks involved, including potential dividend cuts and tax implications, and to align investments with personal financial goals.
With thoughtful planning, high dividend stocks can be an excellent addition to a diversified investment strategy.
FAQs About Top high Dividend Paying Stocks
What are the top dividend-paying stocks in India for 2025
The top dividend-paying stocks in India for 2025 include companies like ONGC, Vedanta, BPCL, Coal India, and HCL Technologies. These stocks are popular among investors because they provide a reliable source of income through regular dividends and belong to established sectors like energy, metals, and technology.
How do dividends work, and what makes high dividend-paying stocks attractive?
Dividends are portions of a company’s profits distributed to shareholders, typically on a regular basis. High dividend-paying stocks are attractive because they provide a steady income stream regardless of stock market fluctuations.
Which sectors in India are known for high dividend yields?
In India, high dividend yields are often found in sectors such as energy (e.g., ONGC, BPCL), metals and mining (e.g., Vedanta, Coal India, Hindustan Zinc), finance (e.g., REC and Power Finance Corporation), and technology (e.g., HCL Technologies).
Why do government-backed companies often offer high dividend yields?
Government-backed companies, such as ONGC, Coal India, and BPCL, often offer high dividend yields because they are established entities with consistent revenue streams.
What are some risks associated with investing in high dividend-paying stocks?
Although high dividend-paying stocks offer steady income, they can also carry risks. Dividend payments can be reduced or suspended if a company faces financial difficulties.
How are dividends from Indian stocks taxed, and what should investors know about TDS?
Dividends from Indian stocks are subject to Tax Deducted at Source (TDS) if they exceed Rs. 5,000 in a financial year. The TDS rate is 10%, which the company deducts before paying dividends to shareholders. It’s important for investors to ensure their PAN is linked with their investment accounts to avoid higher TDS. Additionally, dividends are included in the investor’s total taxable income, and the final tax rate depends on their income tax slab.
