SIP Calculator with Step-Up, Goal Mode and Tax on Redemption

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Tax rules last checked on 10 October 2026 in the Income-tax Act, 2025 as amended by the Finance Act, 2026, on incometaxindia.gov.in: section 196 (20% on short-term gains from equity-oriented fund units), section 198 (12.5% on long-term gains above ₹1,25,000), section 2(101) (held 12 months or less is short-term) and section 76 (debt fund units bought from 1 April 2023 are always short-term). No fund return is built in; you type the one you expect.

Short answer

₹10,000 a month for 15 years at a 12% yearly return grows to ₹47.59 lakh on ₹18 lakh put in. Sold all at once from an equity fund, the tax is ₹3,69,059, so ₹43.90 lakh reaches your bank. At 6% inflation that is worth ₹18.32 lakh in today's money. Raise the SIP by 10% each year for 20 years and the same ₹10,000 start becomes ₹1.86 crore, on ₹68.73 lakh put in.

Why SIP calculators disagree: 12% a year or 1% a month

Put ₹5,000 a month for 10 years at 12% into two popular calculators and you can get two answers: ₹11.62 lakh or ₹11.20 lakh. Both use the same annuity-due formula. The gap is the monthly rate. One takes 12% ÷ 12 = 1% a month, which compounds to 12.68% a year. The other takes the monthly rate that compounds to exactly 12% a year: (1.12)^(1/12) − 1, or 0.949%.

Mutual fund returns are reported as CAGR, a yearly compounded figure. If you type in a fund's 10-year return, the second method is the one that matches it. This calculator uses it by default and tells you what the ÷ 12 method would have shown. You can switch methods under "Tax on redemption, inflation and more".

What a step-up does

A step-up raises the SIP once a year, by a percentage or by a fixed amount. ₹10,000 a month for 20 years at 12% grows to ₹91.99 lakh on ₹24 lakh put in. With a 10% step-up the SIP reaches ₹61,159 a month in year 20 and the value is ₹1.86 crore, but you also put in ₹68.73 lakh. Much of the extra value is your own extra money, so judge a step-up by what you can afford each year as well as by the final figure.

If your pay will stop rising at some point, set a ceiling in "Stop stepping up at". With the SIP capped at ₹25,000 a month, the same plan ends at ₹1.58 crore on ₹49.12 lakh.

Value after 20 years at 12% a year, ₹10,000 a month to start

Money in at the start of each month, valued at the end of year 20. Worked with this calculator.

Tax when you redeem: each instalment has its own date

Every SIP instalment buys units on its own date, and the tax law looks at each lot separately. For an equity-oriented fund (at least 65% in shares of Indian listed companies), units held 12 months or less give short-term gains, taxed at 20% under section 196 of the Income-tax Act, 2025. Units held longer give long-term gains: the first ₹1,25,000 of these in a tax year is free, and the rest is taxed at 12.5% under section 198. Add 4% cess on top.

So if you sell a 15-year SIP all at once, the last 12 instalments are still short-term. On ₹10,000 a month at 12%, that is ₹7,665 of gain at 20%. The other ₹29.52 lakh is long-term: ₹1.25 lakh free and ₹28.27 lakh at 12.5%. The tax comes to ₹3,69,059. The calculator splits your gain the same way, and if you enter the long-term gains you have already booked this tax year, it uses up the allowance first.

Debt funds work differently. Units of a fund with more than 65% in debt and money market instruments, bought on or after 1 April 2023, count as short-term however long you hold them (section 76), so the whole gain is taxed at your slab rate. Pick "Debt fund" and your slab to see that version.

Worked examples

₹10,000 a month for 15 years, then redeemed

Meera starts a ₹10,000 SIP in an equity fund and expects 12% a year. After 15 years she has put in ₹18,00,000 and her units are worth ₹47,59,314.

She sells everything in one go. The last 12 instalments give ₹7,665 of short-term gain, taxed ₹1,533 at 20%. The remaining ₹29,51,649 is long-term: ₹1,25,000 is free and ₹28,26,649 is taxed at 12.5%, which is ₹3,53,331. With 4% cess the tax is ₹3,69,059 and she gets ₹43,90,255. At 6% inflation that buys what ₹18.32 lakh buys today.

₹50 lakh in today's money, 15 years away

Kabir wants ₹50 lakh in today's rupees for his daughter's college fees in 15 years. At 6% inflation that is ₹1,19,82,791 on the day. At 12% a year, with the tax on redemption counted, goal mode says he needs a flat SIP of ₹27,359 a month.

If he raises it by 10% every year, he can start at ₹15,557. Ignoring tax, a flat ₹25,178 would be enough; the ₹2,181 a month gap is what the tax costs him.

Tips and tricks

How we would use it

Questions people ask

What will a ₹10,000 monthly SIP become in 15 years?

₹47.59 lakh on ₹18 lakh put in, at a 12% yearly return. At 10% it is ₹40.16 lakh, and at 8% ₹33.98 lakh. From an equity fund sold all at once, you keep ₹43.90 lakh of the 12% figure after tax.

What is the SIP formula?

FV = M × ((1 + i)ⁿ − 1) ÷ i × (1 + i), where M is the monthly amount, n the number of months and i the monthly rate. For a 12% yearly (CAGR) return, i = (1.12)^(1/12) − 1 = 0.949%. Some calculators use i = 12% ÷ 12 = 1%, which gives a higher answer.

Do I pay tax on a SIP every year?

No. Capital gains tax is due in the tax year you redeem units, and only on the units you redeem. Units you keep are not taxed.

How is tax worked out when I redeem a SIP?

Each instalment is its own lot. In an equity-oriented fund, lots held 12 months or less are short-term and taxed at 20%; older lots are long-term, with ₹1,25,000 a tax year free and 12.5% on the rest, plus 4% cess. Units of debt funds bought from 1 April 2023 are taxed at your slab rate however long you hold them.

Is the ₹1.25 lakh allowance per SIP or per year?

Per tax year, across all your long-term gains on listed equity shares, equity-oriented fund units and business trust units under section 198. It is not carried forward, and gains redeemed in different tax years are each checked against that year's ₹1,25,000.

Does the calculator count the expense ratio?

A fund's NAV is already after its expenses, so published returns are net of the expense ratio. If your expected return comes from such figures, the expenses are already in it. Exit loads and stamp duty on purchases are not counted.

Written by Bulan Sarkar, who checked the results by hand and against a second public calculator. Use it for planning; it isn't tax or investment advice.

Sources

SWP Calculator

How long a mutual fund lumpsum lasts on a monthly withdrawal, the most you can take out, the corpus you need, and the tax on each withdrawal by tax year.