SIP Calculator

Understanding this calculator

The calculator above answers the arithmetic exactly. What it cannot tell you is how much to trust the answer — and that depends almost entirely on one input.

The return assumption is doing all the work

Change the monthly amount by 10% and the final figure moves by 10%. Change the expected return from 12% to 10% on a twenty-year SIP and it falls by roughly a third. Every other input is arithmetic; this one is a forecast, and it is the only number on the page that nobody actually knows.

12% a year is the figure most Indian SIP calculators default to, including this one. It is a reasonable long-run assumption for Indian equity, and it is not a promise. Real markets do not deliver it as a smooth line — they deliver it as a series of very good years, some flat ones and occasional severe falls that happen to average out over long periods.

A steady return and a realistic one are not the same

This model grows your money at the same rate every month. Markets do not. For a SIP that difference can work in your favour: a falling market means the same instalment buys more units, so the money you invest during bad years does the heaviest lifting when prices recover. Buying at many prices rather than one is the whole reason SIPs exist.

Where the smoothing flatters the answer is at the end. A corpus that has spent twenty years compounding is at its largest in the final years, so a sharp fall just before you need the money costs far more than the same fall in year three. The calculator shows a value on a single chosen date, and that date is not guaranteed to be a good one.

What the model leaves out

• ▹**Fund expenses.** A mutual fund charges an expense ratio, deducted from the fund's returns before you ever see them. If you enter the return you expect to receive, it is already accounted for. If you enter a headline market return, it is not.
• ▹**Exit loads.** Many equity funds charge a small penalty on units redeemed within a year. It applies to exactly the newest units — the same ones that are still short-term for tax.
• ▹**Missed instalments.** The model assumes every instalment arrives. The most common reason a real SIP underperforms a projected one is that it was paused during a fall, which is precisely when its instalments were buying the most.
• ▹**Your own behaviour.** No calculator models the decision to stop. It is the largest single variable in most real outcomes and the only one entirely within your control.

Why the tax figure is not a rounding detail

Most SIP calculators online show a gross figure and stop. This one applies capital gains tax instalment by instalment, because a SIP is not one investment — it is one purchase per month, each with its own twelve-month clock, and equity units are redeemed oldest-first.

The consequence is permanent: whenever you sell, the twelve most recent instalments have not been held for more than a year, so they are short-term and taxed at 20% with no exemption against them. Run a SIP for twenty years and that is still true of the last twelve instalments. How a SIP is taxed works through it in full.

If you are comparing this result against a figure from another site, check whether that figure is before tax. A gross number and a net number are not comparable, and the gap is not small.

Reading the result properly

Three numbers matter, in this order. What you put in, which is a fact. What it is worth in today's money, which strips out the illusion that a large future number means a large amount of purchasing power. And the gap between them, which is the actual return on your effort.

The nominal maturity figure is the least useful of the three and the one people quote. ₹1 crore in twenty years at 6% inflation buys roughly what ₹31 lakh buys today — which is why this calculator shows the real figure beside the nominal one rather than leaving you to discover it later.