How SIP returns are calculated
Each monthly instalment grows for the months left until the end. The calculator uses the standard future-value formula that AMFI and fund houses use, assuming you invest at the start of every month:
FV = P × [((1 + i)n − 1) ÷ i] × (1 + i)
P is the monthly SIP, i is the monthly return (annual ÷ 12 ÷ 100) and n is the number of months. ₹5,000 a month for 10 years at 12% gives ₹11,61,695 from ₹6,00,000 invested.
Step-up makes the biggest difference
Raise the SIP by 10% each year, in line with your salary, and the same ₹5,000 start becomes ₹16.87 lakh in 10 years and ₹99.44 lakh in 20, against ₹49.96 lakh without the step-up.
What return should you assume?
Nobody can promise a return. Over long periods, broad Indian equity index funds have delivered roughly 10–14% a year, with years of losses in between. Hybrid funds sit lower, debt funds around 6–8%. Plan with a cautious rate, and treat anything above it as a bonus.
Tax on SIP gains
For equity funds, gains on units held over 12 months are long-term and taxed at 12.5% above ₹1.25 lakh of gains a year; units sold within 12 months are taxed at 20%. Each SIP instalment has its own 12-month clock. Debt fund gains on units bought after April 2023 are taxed at your slab rate.
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Questions people ask
Is the SIP return guaranteed?
No. Mutual fund returns depend on the market. The calculator shows what happens at a steady return; real returns go up and down year to year.
Is SIP better than a lumpsum?
If you have a large amount today, investing it at once has historically done better in rising markets. A SIP spreads the risk of investing at a peak and fits a monthly salary. Many people do both.
Can I stop or pause a SIP?
Yes. There is no penalty for stopping a SIP; your units stay invested. Some funds allow a pause of 1–6 months. Only an exit load may apply if you redeem units within a year, usually 1% for equity funds.