SIP Calculator
Monthly SIP with step-up, lump sum, expense ratio, inflation adjustment and post-LTCG tax returns.
Tax note: LTCG shown assumes all units held > 12 months. In a running SIP, the final 12 months of installments attract STCG at 20% (plus cess). Rate as per Section 112A, Finance Act 2024. Consult a CA for precise tax planning.
This calculator is for illustration only. Returns shown are not guaranteed — actual mutual fund returns depend on market conditions and fund performance. Past performance is not indicative of future results. LTCG tax is calculated at 13% effective (12.5% + 4% cess) on gains above ₹1,25,000 per Section 112A, Finance Act 2024. Consult a SEBI-registered advisor or CA before making investment decisions.
How to use this SIP calculator
What is a SIP?
A Systematic Investment Plan (SIP) is a method of investing a fixed amount in a mutual fund at regular intervals — typically monthly. SIPs use rupee cost averaging: you buy more units when markets are low and fewer when markets are high, smoothing out the effect of volatility over time. SIPs are governed by SEBI's mutual fund regulations and can be started, paused, or stopped at any time.
How is SIP return calculated?
The future value of a SIP is calculated using the annuity due formula:
Where P = monthly SIP, r = monthly rate (annual rate ÷ 12), n = total months. This is the formula used by AMFI and all SEBI-registered platforms.
What is a step-up SIP and when should you use it?
A step-up SIP (also called top-up SIP) automatically increases your SIP amount by a fixed percentage each year. If your salary grows 10% annually, stepping up your SIP by 10% keeps your investment aligned with your income. Step-up SIPs substantially increase your final corpus — the additional amounts compound for several years and the impact compounds too.
How does expense ratio affect SIP returns?
The expense ratio is the annual fee charged by a mutual fund, deducted from NAV daily. It directly reduces your effective return. A 1.5% expense ratio on a fund targeting 13% returns gives you an effective 11.5%. Over 20 years, that 1.5% difference reduces your corpus by roughly 25%. Direct plans of the same fund have lower expense ratios than regular plans — typically 0.5%–1% lower.
What is LTCG tax on equity mutual fund SIPs?
Under Section 112A of the Income Tax Act, Long-Term Capital Gains on equity mutual funds held for more than 12 months are taxed at 12.5% (increased from 10% in Budget 2024, effective July 23, 2024). The first ₹1,25,000 of LTCG per financial year is exempt. With 4% health and education cess, the effective rate is 13%. For SIPs, each installment has its own holding period — installments redeemed within 12 months of purchase attract Short-Term Capital Gains tax at 20% (plus cess).
Frequently asked questions
Q: How is SIP return calculated?
SIP return is calculated using the future value of an annuity formula: FV = P × [((1+r)^n − 1) / r] × (1+r), where P is the monthly SIP amount, r is the monthly return rate (annual rate ÷ 12), and n is the total number of months. This is the standard formula used by AMFI and all SEBI-registered calculators.
Q: What is a step-up SIP and how does it help?
A step-up SIP (also called top-up SIP) increases your SIP amount by a fixed percentage each year — typically 10%, aligned with annual salary growth. Because the additional amounts compound for several years, a step-up SIP can substantially increase your final corpus compared to a flat SIP. For example, a ₹10,000/month SIP at 10% step-up for 20 years produces significantly more than a flat ₹10,000/month SIP.
Q: What is the LTCG tax on SIP mutual fund redemptions in India?
As per the Union Budget 2024 (effective July 23, 2024), Long-Term Capital Gains (LTCG) on equity mutual funds held for more than 12 months are taxed at 12.5% flat (plus 4% cess = 13% effective) under Section 112A. The first ₹1,25,000 of LTCG per financial year is exempt. For SIPs, each installment has its own acquisition date — installments held less than 12 months at redemption attract Short-Term Capital Gains (STCG) tax at 20% (plus cess).
Q: What is the difference between direct and regular mutual fund expense ratios?
Direct mutual fund plans bypass the distributor and have lower expense ratios — typically 0.05%–0.5% for index funds and 0.5%–1% for active funds. Regular plans include distributor commission and have expense ratios of 1%–2.5%. Over 20+ years, even a 1% difference in expense ratio can reduce your corpus by 15–25%. The expense ratio directly reduces your effective annual return.
Q: How much does ₹10,000/month SIP grow to in 20 years at 12%?
A ₹10,000/month SIP at 12% annual return over 20 years grows to approximately ₹99.9 lakh (just under ₹1 crore). Total invested: ₹24 lakh. Estimated gains: ₹75.9 lakh. This calculation uses the annuity due formula assuming returns compounded monthly. Actual returns depend on fund performance and market conditions.
Q: Should I account for inflation when calculating SIP returns?
Yes. A corpus of ₹1 crore in 20 years is worth less in today's purchasing power due to inflation. At 6% annual inflation, ₹1 crore in 20 years has the purchasing power of roughly ₹31 lakh today. This is called the real value of your corpus. To calculate it: Real value = Corpus ÷ (1 + inflation rate)^years. Use the inflation adjustment toggle in this calculator to see the real value alongside the nominal corpus.