Even though the tax differential is slightly higher in the dividend option I would still advice the dividend option for income streams. The simple reason is the science behind it…now income distribution can happen only out of earnings..i.e. if only profits are made, then only is it distributed. Thus if we are to be responsible over the long term and not have a situation of eroding capital, then dividend flow is the best.
Even though I do not recomend schemes, there is one fund that I highly suggest for income flows and the scheme is UTI MASTERSHARE. The fund has a stupendous record of 30 years of uninterrupted dividend and considering the kind of upheavels in the past, this is HUGE. The payout happens during the festival season, so you should be expecting it in sep-oct every year. The payout is also attractive at a minimum of 8.6%.