SIP Calculator

What Is SIP — and Why Is It the Most Popular Way to Invest in India?

A Systematic Investment Plan (SIP) is simply a commitment to invest a fixed amount into a mutual fund at regular intervals — usually monthly. The mutual fund uses that money to buy units at the prevailing NAV (Net Asset Value). As you invest month after month, you accumulate units. Over time, as the fund grows, the value of those units grows with it.

SIP has become India's favourite investment method — AMFI data shows monthly SIP inflows exceeding ₹25,000 crore as of early 2026, up from ₹7,000 crore just five years ago. The reason for this growth is simple: SIP removes the two biggest barriers to investing — the need for a large lump sum to start, and the need to time the market.

When you invest via SIP, you automatically buy more units when markets are down (because NAV is lower) and fewer units when markets are up. This is called rupee cost averaging, and it works in your favour over time by lowering your average cost per unit compared to investing a lump sum at a single point.

How SIP Returns Are Calculated — and Why the Numbers Look So Dramatic

The SIP return calculation is a future value of an annuity formula. Each monthly instalment grows at the fund's monthly return rate for the remaining period. The formula compounds monthly, which is why even modest return assumptions produce impressive final numbers over long periods.

The calculator works month by month: your ₹10,000 invested in month 1 grows for 120 months (10 years) at the expected monthly rate. Your ₹10,000 in month 2 grows for 119 months. And so on. The sum of all these future values is your total corpus. This is mathematically precise — the same formula used by AMCs and financial planning software.

Why the "expected return" number matters so much

The return assumption is the single biggest driver of your projected corpus — and also the biggest source of uncertainty. Here are realistic benchmarks based on historical Indian market data as of March 2026:

Large-cap equity funds and Nifty 50 index funds have delivered approximately 12–14% CAGR over rolling 15-year periods. Mid-cap funds have delivered 14–17% but with significantly higher volatility. Hybrid funds (60:40 equity-debt) have delivered around 10–12%. Debt funds typically deliver 6–8%. For long-horizon SIP planning, 12% is a reasonable central estimate for equity funds — not guaranteed, but historically grounded.

One practical caution: past returns do not guarantee future performance. Indian equity markets have seen multiple 30–50% drawdowns in their history. A well-structured SIP strategy accounts for this by focusing on the long term (10+ years) and not panicking during market corrections.

SIP Taxation in FY 2025–26 (AY 2026–27) — Exactly What You Pay and When

Understanding how your SIP gains are taxed is essential — it directly affects your real post-tax returns. Here's the complete, current picture as of 28 March 2026.

Income tax slabs (FY 2025–26, AY 2026–27)

Budget 2026-27, presented in February 2026, made no changes to income tax slabs or LTCG rates. The slabs introduced in Budget 2025 continue to apply unchanged for FY 2026-27 as well. The new tax regime is the default for all taxpayers from AY 2025-26 onward.

Capital gains tax on SIP redemption (confirmed as of 28 March 2026)

When you redeem your SIP units, each monthly instalment is treated as a separate purchase with its own holding period (FIFO applies on redemption — oldest units sold first). Here are the rates that apply:

The ₹1.25 lakh LTCG exemption — how to maximise it

Every financial year, the first ₹1.25 lakh of long-term capital gains from equity mutual funds (and listed equity) is completely exempt from LTCG tax. This applies to the aggregate across all your equity investments in that year. For most retail SIP investors whose annual gain is below ₹1.25L, the effective LTCG tax rate is zero — which is an enormous advantage over FD interest, which is fully taxable at your slab rate.

One practical strategy called tax loss harvesting involves selling loss-making units to offset gains in the same financial year, thereby reducing your taxable LTCG. Long-term capital losses can only be set off against LTCG (not STCG or income), but short-term capital losses can be set off against both STCG and LTCG. This is worth discussing with a financial advisor if your portfolio is large.

Step-Up SIP — The Most Underused Wealth Multiplier in India

A step-up SIP (also called a top-up SIP) automatically increases your monthly SIP amount by a fixed percentage every year. Most people set their SIP amount once and never increase it — even as their salary grows. Step-up SIP fixes this.

The logic is straightforward: as your salary grows, your SIP should grow too. If you start at ₹10,000/month at 25 and get a 10% raise every year, by age 35 your salary has nearly doubled. Keeping your SIP at ₹10,000 while your income doubled is effectively a reduction in your savings rate.

A practical rule: increase your SIP by at least half your annual salary increment percentage. If you get a 12% raise, increase your SIP by 6–10%. Most AMCs allow you to set up automatic annual step-up when you register your SIP — it costs nothing and requires no action on your part after the initial setup.

SIP vs Lump Sum — Which Gives Better Returns?

This is one of the most debated questions in personal finance, and the honest answer is: it depends on market conditions at the time of investment, which nobody can predict reliably.

The practical answer for most people in 2026: SIP for regular monthly income, and optionally add lump sum investments during market corrections of 15–25% from recent highs. The combination gives you the discipline of SIP with the opportunistic buying of lump sum. Trying to perfectly time lump sum investments rarely works for retail investors — the data consistently shows that "time in market" beats "timing the market" for equity over 10+ year periods.

How Much SIP Do You Need to Reach ₹1 Crore?

One of the most common questions. The answer depends entirely on your return assumption and time horizon. Here's a concrete table at different returns and periods:

The table makes the power of time viscerally clear. At 12% returns, reaching ₹1 crore takes ₹43,100/month over 10 years — but only ₹2,900/month over 30 years. That's a 15x difference in required monthly commitment, purely because of compounding time. Every year you delay starting your SIP increases the required monthly amount by roughly 10–15%.

These are pre-tax figures. After accounting for LTCG at 12.5% on gains above ₹1.25L, your post-tax corpus will be slightly lower. For a 20-year ₹10K/month SIP at 12%, the LTCG tax on maturity would be approximately ₹8–12L depending on when you redeem and how you structure it — significant, but still far better than the post-tax return of a comparable FD investment.

6 Things Smart SIP Investors Do Differently

How to Use This SIP Calculator for Real Planning

Basic calculation

Enter your monthly SIP amount, the expected annual return (12% is a reasonable central estimate for equity funds), and the investment period in years. The estimated returns, total value, absolute return percentage, and wealth ratio update instantly. The growth chart shows how your corpus builds year by year — switch between the growth curve, bar chart, and table to get different perspectives.

Using the step-up SIP feature

Toggle on "Step-Up SIP" and set your expected annual increment percentage. Use 10% if your salary grows by roughly 10% annually. The calculator will show "Extra Wealth from Step-Up vs Regular SIP" — this single number often motivates people to commit to annual increments, because the extra wealth can be enormous over 15–20 year horizons.

Testing different return scenarios

Run the calculation three times: once at 10% (conservative), once at 12% (moderate), and once at 15% (optimistic). Note the range of outcomes. This gives you a realistic sense of the uncertainty in any equity projection — your actual result will fall somewhere in this range, depending on market conditions over your investment horizon.

Estimating post-tax returns

The calculator shows pre-tax returns. To estimate your post-tax corpus, subtract approximately 12.5% of your total gains above ₹1.25 lakh. For a ballpark: if your total gain is ₹50L over 20 years, subtract 12.5% of ₹48.75L (₹50L minus ₹1.25L exemption) = roughly ₹6.1L in LTCG tax. Your post-tax corpus would be approximately ₹50L − ₹6.1L = ₹43.9L in gains on top of your invested amount. Strategic tax harvesting each year can significantly reduce this tax burden.

Frequently Asked Questions About SIP Investment

• What is the LTCG tax on SIP mutual fund redemption in FY 2025–26? ▼
  For equity-oriented mutual funds (those investing ≥65% in Indian equities), the long-term capital gains (LTCG) tax rate for FY 2025–26 (AY 2026–27) is 12.5% on gains exceeding ₹1.25 lakh per financial year. There is no indexation benefit. The 4% Health & Education Cess applies on top of the 12.5%.
  
  For SIP investments, each monthly instalment is treated as a separate purchase with its own holding period. Units held for more than 12 months qualify for LTCG at 12.5%; units held 12 months or less attract STCG at 20%. When you redeem, FIFO (First In, First Out) applies — the oldest units are considered sold first.
  
  Budget 2026-27 (presented February 2026) made no changes to these rates. They remain unchanged from the Budget 2024 announcement effective July 23, 2024.
• How much SIP per month is needed to create ₹1 crore in 10 years? ▼
  At an expected return of 12% per annum, you need approximately ₹43,100 per month to accumulate ₹1 crore in 10 years. At 10% returns, the required amount is approximately ₹48,800 per month. At 15% returns, it drops to approximately ₹35,800 per month.
  
  These are pre-tax figures. After accounting for LTCG at 12.5% on gains above ₹1.25 lakh, the post-tax corpus will be slightly lower. Strategic annual tax harvesting (redeeming and reinvesting to book the ₹1.25L annual LTCG exemption) can significantly reduce the total LTCG payable.
• Is SIP better under the new tax regime or old tax regime in FY 2025–26? ▼
  The choice of tax regime does not change the capital gains tax on your SIP returns. LTCG at 12.5% on equity funds and STCG at 20% apply under both the old and new tax regimes — capital gains are not added to your regular income for computing which slab they fall in. They're taxed at the flat rates regardless of your income level or chosen regime.
  
  Where the regime choice matters for SIP investors is on the ELSS (Equity Linked Savings Scheme) front. Under the new tax regime, the Section 80C deduction for ELSS investments is not available. So if your main reason for choosing ELSS was the 80C benefit, it becomes less compelling under the new regime — a plain index fund with no lock-in may be more appropriate.
  
  Under the old regime, ELSS qualifies for 80C deduction (up to ₹1.5L) plus the LTCG benefit on redemption — a double advantage that makes it one of the most tax-efficient equity investments.
• What is the new income tax slab for FY 2025–26 under the new regime? ▼
  Under the new tax regime for FY 2025–26 (AY 2026–27), the income tax slabs are: Up to ₹4 lakh — Nil; ₹4L to ₹8L — 5%; ₹8L to ₹12L — 10%; ₹12L to ₹16L — 15%; ₹16L to ₹20L — 20%; ₹20L to ₹24L — 25%; Above ₹24L — 30%. Plus 4% Health & Education Cess on tax payable.
  
  Key benefit: Section 87A rebate of up to ₹60,000 means taxpayers with income up to ₹12 lakh pay zero tax. Salaried individuals also get a ₹75,000 standard deduction, making the effective tax-free limit ₹12.75 lakh for salaried taxpayers. The new regime is the default from AY 2025-26 onward. Budget 2026 confirmed no changes to these slabs for FY 2026-27.
• Can I stop or pause my SIP anytime? Is there a penalty? ▼
  Yes, you can stop a SIP anytime without any penalty from the mutual fund. SIPs are not fixed-term commitments like FDs or PPF — you can pause, stop, or modify the amount at any time through your AMC's app or website or through your mutual fund distributor/platform.
  
  The only thing that happens when you stop a SIP is that future automatic debits stop. The units you've already accumulated remain invested and continue to grow (or fall) with the market. You can redeem them whenever you choose, subject to the applicable capital gains tax at that time. ELSS SIPs are the exception — ELSS units have a 3-year lock-in from each purchase date, so units bought under an ELSS SIP cannot be redeemed until 3 years after each instalment.
• Does SIP guaranteed return? How accurate is the SIP calculator? ▼
  No. SIP in equity mutual funds does not guarantee any return. The calculator projects returns based on a constant assumed annual return rate — in reality, mutual fund returns vary significantly year to year. Markets can and do fall 30–50% in bad years, and the actual corpus at any given point will differ from the projection.
  
  The calculator's value is in comparing scenarios and understanding the mechanics of compounding and step-up — not in giving you a guaranteed number. The longer your investment horizon (10+ years), the more reliable the projection becomes, because short-term volatility averages out over long periods. Over any rolling 15-year period in Indian equity markets since 2000, SIP returns have been positive and generally between 10–15% CAGR.
• How does the RBI rate cut in February 2025 affect SIP returns? ▼
  The RBI cut the repo rate to 6.25% in February 2025. Rate cuts generally have two effects on equity markets: they reduce borrowing costs for companies (supporting corporate earnings growth), and they make fixed-income alternatives like FDs less attractive relative to equity (supporting equity fund inflows).
  
  For SIP investors, this is broadly positive: lower rates support equity valuations and may sustain the current bull market trend. Debt fund investors also benefit as bond prices rise when rates fall. However, rate cuts also mean FD and liquid fund returns will be lower — making equity SIPs relatively more attractive compared to safe debt alternatives.
  
  The practical advice remains unchanged: don't alter your SIP strategy based on monetary policy changes. SIP's strength is that it works across interest rate cycles by averaging your entry price regardless of what rates do.