What is a SIP Calculator and How Does It Work?
A SIP (Systematic Investment Plan) calculator computes the future value of regular monthly investments in a mutual fund over time, assuming a given annual return rate. It uses 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. For example: ₹10,000/month for 15 years at 12% per annum grows to approximately ₹50.2 lakh — with only ₹18 lakh invested. The remaining ₹32 lakh is pure compounding gain.
How Much SIP Do You Need for ₹1 Crore?
This is the most common question from Indian investors. The answer depends on your time horizon and expected return:
| Time Horizon | At 10% p.a. | At 12% p.a. | At 15% p.a. |
|---|
| 10 years | ₹48,900/mo | ₹43,500/mo | ₹36,100/mo |
| 15 years | ₹24,800/mo | ₹20,000/mo | ₹15,300/mo |
| 20 years | ₹13,500/mo | ₹10,100/mo | ₹6,900/mo |
| 25 years | ₹7,500/mo | ₹5,300/mo | ₹3,300/mo |
The longer your horizon, the dramatically lower the required SIP — this is the power of compounding. Starting early is far more impactful than investing more later.
What is Step-up SIP (Top-up SIP)?
A step-up SIP increases your monthly investment by a fixed percentage every year — usually 10%, aligned with typical salary increments. Instead of investing ₹10,000 flat every month for 15 years, you start at ₹10,000 and increase by 10% each year (Year 2: ₹11,000, Year 3: ₹12,100, and so on).
The results are dramatic. On a 15-year SIP at 12% returns:
| SIP Type | Starting SIP | Total Invested | Final Corpus |
|---|
| Flat SIP | ₹10,000/mo | ₹18,00,000 | ₹50,20,000 |
| 10% Step-up | ₹10,000/mo | ₹38,40,000 | ₹1,00,30,000 |
| 15% Step-up | ₹10,000/mo | ₹62,60,000 | ₹1,73,50,000 |
A 10% annual step-up roughly doubles your final corpus. Most AMCs (Axis, HDFC, SBI, Mirae Asset, etc.) support step-up SIP instructions at the folio level.
Mutual Fund Capital Gains Tax — Union Budget 2025-26 Rules
Union Budget 2025-26 changed the tax rates on mutual fund gains. Here is the complete updated picture:
| Fund Type | Holding Period | Tax Type | Tax Rate | Exemption |
|---|
| Equity / Equity Hybrid (≥65%) | > 1 year | LTCG | 12.5% + 4% cess | ₹1.25 lakh/FY |
| Equity / Equity Hybrid (≥65%) | ≤ 1 year | STCG | 20% + 4% cess | None |
| Debt MF (purchased after Apr 1, 2023) | Any | Slab rate | Your income tax slab + 4% cess | None |
| Gold / International / FoF | Varies | Slab rate | Your income tax slab + 4% cess | None |
Key change from Union Budget 2025-26: LTCG rate for equity increased from 10% to 12.5%, STCG from 15% to 20%. The LTCG exemption increased from ₹1 lakh to ₹1.25 lakh per financial year.
LTCG Tax Harvesting Strategy — Save ₹15,600 Per Year
Since the first ₹1.25 lakh of equity LTCG is completely tax-free every financial year, you can deliberately book gains up to this limit and immediately reinvest — resetting your cost basis with zero tax. This is called LTCG harvesting.
Example: You hold a fund with ₹80,000 of unrealised LTCG. Redeem partially to book ₹1.25 lakh of LTCG in March — tax = ₹0. Immediately reinvest. Your new cost basis is higher, so future tax liability is lower. Repeat every year. Over 10 years, this strategy can save ₹1–2 lakh in taxes for a typical investor.
Now find the right mutual fund for your SIP
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Frequently Asked Questions
How is SIP return calculated in India?
SIP returns use the Future Value of Annuity formula: FV = P × [(1+r)^n – 1] / r × (1+r), where P = monthly SIP, r = monthly rate (annual ÷ 12), n = months. The annualised return (XIRR) accounts for the timing of each instalment.
What return rate should I assume for my SIP calculator?
For long-term planning (10+ years), use 10–12% for large cap / index funds, 12–14% for flexi cap / multi cap, and 12–15% for mid cap. Never assume more than 15% — it leads to under-saving. Historical NIFTY 50 SIP XIRR (15 years) has been around 12–13%.
What is step-up SIP?
Step-up SIP (also called top-up SIP) means increasing your monthly SIP amount by a fixed percentage every year — typically 10%. Starting at ₹10,000/month with a 10% annual step-up: Year 2 = ₹11,000, Year 3 = ₹12,100, and so on. A 10% annual step-up on a 15-year SIP can grow your final corpus by 50–70% compared to a flat SIP at the same starting amount.
Is SIP better than lump sum?
For salaried investors, SIP is almost always the right choice. It removes the need to time the market and averages your cost through rupee-cost averaging. Lump sum can outperform in a steadily rising bull market, but most investors don't have large sums available and can't time entry accurately.
How much SIP do I need for ₹1 crore in 15 years?
At 12% annual returns: approximately ₹20,000/month. At 10%: ₹24,800/month. At 15%: ₹15,300/month. Use the Goal SIP Calculator above for your exact number.
What is the LTCG tax on equity mutual funds in India?
After Union Budget 2025-26: 12.5% on gains above ₹1.25 lakh per financial year, plus 4% health & education cess. Short-term gains (under 1 year) are taxed at 20% + 4% cess. The ₹1.25 lakh exemption applies to your total equity LTCG across all investments in a financial year.
Is debt mutual fund still tax efficient after 2023?
No. The Finance Act 2023 removed the LTCG + indexation benefit for debt mutual funds purchased after April 1, 2023. All gains are now taxed at your income tax slab rate + 4% cess, regardless of holding period. For investors in the 30% slab, this makes debt MFs less tax-efficient than bank FDs which also attract slab-rate tax.
⚠️ Not Investment Advice: BullWiser is not a SEBI-registered investment adviser. All calculations are educational projections based on assumed constant returns. Actual returns vary. Consult a SEBI-registered financial advisor before investing. Tax calculations are indicative only — consult a CA or tax advisor before filing your ITR. Full Disclaimer →