SWP Calculator with Tax: How Long Your Money Lasts

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Tax rules last checked on 14 October 2026 in the Income-tax Act, 2025 as amended by the Finance Act, 2026, on incometaxindia.gov.in: section 2(101)(b) (equity fund units held 12 months or less are short-term), section 196 (20% on those short-term gains), section 198 (12.5% on long-term gains above ₹1,25,000 a tax year) 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

₹50 lakh in an equity fund, ₹30,000 taken out every month, 9% a year: the money never runs out, and after 20 years ₹88.57 lakh is still in the fund. Tax on the 20 years of withdrawals is ₹1,98,171, 2.75% of what you take out, because most of each withdrawal is your own money coming back. Raise the withdrawal 6% a year to keep up with prices and the same ₹50 lakh runs out after 18 years 4 months. To make it last 25 years with that 6% raise, start at ₹23,915 a month.

How an SWP works, month by month

You put a lumpsum in a mutual fund and ask the fund house to sell units worth a fixed amount on a set date each month. The units left keep earning. So the balance rises with the return and falls with each withdrawal, and whether it grows or shrinks depends on which is bigger.

On ₹50 lakh at 9% a year, the fund earns about ₹36,036 in the first month. Take out ₹30,000 and the balance still rises. Take out more than ₹36,036 and you start eating into the lumpsum. That figure is also what the "Most I can take out" mode gives if you ask it to leave the ₹50 lakh untouched after 25 years.

The SWP calculators we checked (Groww, ClearTax, FundsIndia) stop at the balance and leave out tax. Some calculators and worked examples apply the yearly rate as yearly ÷ 12 each month, which compounds to more than the yearly figure. Fund returns are quoted as CAGR, so by default this calculator uses the monthly rate that compounds to your yearly figure, and tells you what the ÷ 12 method would show. Both choices are under "Tax, units you already hold and inflation", along with whether money comes out at the start or the end of each month.

Tax on SWP: only the gain inside each withdrawal

A withdrawal is a sale of units, and tax falls only on the gain in the units sold, not on the whole amount. In the first months almost all of a withdrawal is your own money. On ₹50 lakh at 9%, the gain inside the first ₹30,000 is ₹215.

For an equity-oriented fund (at least 65% in shares of Indian listed companies), units sold within 12 months of buying them give short-term gains, taxed at 20% under section 196. After 12 months the gains are long-term: the first ₹1,25,000 of them in each tax year is free, and the rest is taxed at 12.5% under section 198. The allowance resets every 1 April, which is why a steady SWP often pays little or no long-term tax for years. The calculator adds the gains up by tax year, uses the allowance year by year, and adds 4% cess.

Units of a debt fund bought on or after 1 April 2023 (more than 65% in debt and money market instruments) are short-term however long you hold them, under section 76. The gain in each withdrawal is added to your income and taxed at your slab rate.

If you already hold the units, type what you paid for them under "Tax, units you already hold and inflation". The cost goes out with the units in proportion, so a fund that has doubled is half gain from the first withdrawal.

Inflation: a flat withdrawal buys less every year

₹30,000 a month feels fine today. At 6% inflation, the ₹30,000 you take out in year 20 buys what ₹9,354 buys now. Put your inflation figure in "Raise the withdrawal every year by" and the calculator raises it once a year so it keeps pace with prices. Expect the money to run out much sooner: on ₹50 lakh at 9%, a flat ₹30,000 never runs out, and the same start with a 6% raise is gone in 18 years 4 months.

The return matters as much. At 7% instead of 9%, that rising withdrawal empties the fund in 15 years 5 months. A steady return is an assumption. Real funds fall in some years, and a fall in the first few years, while the balance is largest, cuts the life of an SWP more than the same fall later.

Worked examples

₹50 lakh at retirement, ₹30,000 a month

Sunita retires in October 2026 and puts ₹50,00,000 in an equity-oriented hybrid fund. She expects 9% a year and sets up a ₹30,000 monthly SWP.

In 2026-27 she takes out six withdrawals, ₹1,80,000, of which ₹4,455 is gain. It is all short-term, so the tax is ₹927. From October 2027 every withdrawal is long-term, and the yearly gain stays inside the ₹1.25 lakh allowance until 2031-32, the first year she pays long-term tax. Over 20 years she takes out ₹72 lakh, pays ₹1,98,171 in tax, and still has ₹88.57 lakh in the fund, worth ₹27.61 lakh in today's money at 6% inflation.

If she raises the withdrawal 6% every year, the last full one is ₹85,630 a month and the fund runs out after 18 years 4 months. To last 25 years with the raise, the calculator says to start at ₹23,915.

Units bought three years ago

Arjun holds equity fund units worth ₹25,00,000 that cost him ₹15,00,000 more than three years ago. He wants ₹20,000 a month for 15 years and expects 10% a year.

Every withdrawal is long-term, and about 40% of the first one is gain. His yearly gain stays under ₹1.25 lakh for the first three tax years, so he pays nothing until 2029-30, and then ₹936. Over 15 years the tax is ₹74,363 on ₹36 lakh taken out, and ₹24.74 lakh is left. Had he bought the same units the day the SWP started, the tax would be ₹95,828, because the first 12 months of gains would be short-term at 20%.

Tips and tricks

How we would use it

Questions people ask

How long will ₹50 lakh last with ₹30,000 a month?

At 9% a year it never runs out: the fund earns about ₹36,036 a month, more than you take out, and ₹88.57 lakh is left after 20 years. If you raise the ₹30,000 by 6% a year, it lasts 18 years 4 months at 9% and 15 years 5 months at 7%.

How much corpus do I need for ₹50,000 a month?

For 25 years at 9% a year, ₹61.33 lakh pays a flat ₹50,000 a month and leaves nothing. If the ₹50,000 rises 6% a year, you need ₹1.05 crore. Use the "Corpus I need" mode to leave the starting amount behind as well.

Is SWP taxable?

Only the gain inside each withdrawal is taxed. From an equity fund, gains on units held 12 months or less are taxed at 20%, and gains on units held longer at 12.5% above ₹1.25 lakh a tax year, plus 4% cess. From a debt fund bought on or after 1 April 2023, the gain is taxed at your slab rate.

What is the formula for an SWP?

Balance after n months = C × (1 + i)ⁿ − W × ((1 + i)ⁿ − 1) ÷ i, with the withdrawal W at the end of each month and a monthly rate i. For 9% a year, i = (1.09)^(1/12) − 1 = 0.7207%. If the withdrawal rises each year, the calculator works it month by month.

Does this match Groww's SWP calculator?

Before tax, yes. With the defaults (the yearly return as CAGR, each withdrawal at the end of the month), ₹50 lakh, ₹30,000 a month, 9% and 20 years leaves ₹88,56,503 on both. The written example on Groww's page works differently: 10% ÷ 12 a month, with each withdrawal at the start of the month. Choose "Yearly rate ÷ 12" and "Start of each period" here and you get its ₹42,565. Groww stops at the balance; this calculator also works out the tax.

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

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