Step Up SIP Calculator
A step up SIP raises your monthly instalment each year, usually in line with your salary. This calculator shows what that yearly increase compounds into, after capital gains tax and after inflation, next to what a flat SIP of the same starting amount would have managed.
Where it goes
- What's actually left₹56.98 lakh
- Long-term capital gains tax−₹16.05 lakh
- Short-term capital gains tax−₹9,900
- Inflation at 6%−₹1.26 cr
Worth knowing
Is the return really 12% a year?
We grow the money by 12 ÷ 12 each month, the standard monthly compounding convention. Compounded that way, 12% works out to an effective 12.68% a year.
Why is there any short-term tax at all?
Each monthly instalment has its own 12-month clock. 12 of your 240 instalments will still be under a year old on the day you sell, so their gains are taxed at 20% rather than 12.5%.
Why does this not ask for my income tax slab?
Because it would change nothing. Gains on equity funds are taxed at flat rates — 12.5% long-term and 20% short-term — whether you earn ₹5 lakh a year or ₹5 crore. That is unlike a fixed deposit, where the interest is added to your salary and taxed at whatever rate that puts you in.
Is the ₹1.25 lakh exemption per fund?
No — it is per person per financial year, across every equity gain you book that year. This calculator assumes this is your only equity sale that year. If it is not, your tax will be higher.
What is ₹1,82,73,664 actually worth?
About ₹56,97,815 in today's money, at 6% inflation. That is the number that decides what you can buy with it.
What tax rules do the later years use?
We know the rules through FY2026-27. Every year after that is calculated using those same rules, because nobody knows what the rules will be. Treat the later years as an illustration, not a forecast.
Understanding this calculator
A step-up SIP raises the instalment every year, usually in line with a salary. The reason it is worth modelling separately is that the increase does more for the outcome than a better return assumption does.
The increase beats the return
Try the comparison above. Hold everything fixed and raise the expected return by two percentage points. Then reset, and instead add a 10% annual step-up. The step-up usually wins, and it wins with something you control rather than something you have to hope for.
That is the case for this product in one line. The return is a forecast about markets. The step-up is a decision about your own income, and it is the only lever on the page that does not depend on anybody else.
Why it matches how earnings actually work
A flat SIP set at what you could afford in your first job is still that amount a decade later, by which time inflation has reduced what it represents and your income has probably risen. A step-up keeps the contribution roughly constant as a share of earnings instead of letting it quietly shrink.
Why a small increase compounds so hard
A step-up does two things at once, and the second is the one people miss. It raises every future instalment, and it raises them earliest — so the extra money you contribute in year two has the full remaining term to compound, not just the last few years.
That is why the benefit is so much larger than the arithmetic of "10% more each year" suggests. You are not adding 10% to the total contributed. You are adding it at the front of a compounding curve, which is where additions are worth most.
It is the same reason the early years of any long investment matter disproportionately — and the reason starting a smaller SIP now usually beats waiting for a salary that lets you start a larger one.
When a step-up is the wrong structure
- **Irregular income.** If earnings vary year to year, a fixed annual increase creates a commitment that will break in a bad year. A flat SIP topped up manually when there is surplus is more honest about how the money actually arrives.
- **A goal with a fixed cost.** Saving for a specific sum by a specific date means you need a contribution schedule that reaches it, not one that grows indefinitely.
- **Already at your limit.** A step-up you cannot fund will be cancelled, and the most common outcome of a cancelled increase is that the whole SIP gets reviewed and stopped.
The tax treatment is identical to an ordinary SIP: each instalment is its own lot with its own twelve-month clock, redeemed oldest-first. A step-up simply means the newest lots — the ones still short-term when you sell — are the largest ones. How a SIP is taxed has the detail.
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Tax rules applied as of 2026-Q2, last verified against official sources on 2026-08-23. This calculator does arithmetic on the figures you enter — it is not investment advice, not a recommendation, and not a forecast. All calculators