A dividend yield above 4% is generally considered high for Indian equities, 2-4% is moderate and typical for many established dividend-paying companies, while below 2% is considered low (often seen in growth stocks that reinvest profits instead of paying dividends). Compare a stock's yield with its sector average and its own historical yield range.

Dividend yield measures the annual dividend as a percentage of the current share price (how much cash income you earn relative to what you paid). Dividend payout ratio measures what percentage of a company's net profit is distributed as dividends. A stock can have a high yield with a low payout ratio if its share price has fallen sharply.

Not necessarily. An unusually high dividend yield can sometimes signal that the stock price has fallen due to business trouble, making the yield look inflated (a 'dividend yield trap'). Always check whether the dividend is sustainable by reviewing the company's earnings, payout ratio and cash flows before investing purely for yield.

Yes. Since April 2020, dividend income is taxable in the hands of the shareholder at their applicable income tax slab rate. Companies also deduct TDS on dividends above ₹5,000 in a financial year, so factor this into your actual post-tax dividend yield.