SIP Returns Calculator — Mutual Fund SIP Corpus
How SIP Compounding Works
Each monthly instalment earns returns not just for the period it is invested, but those returns then earn further returns — this is the compounding effect. The formula used is the standard SIP Future Value formula:
FV = P × [((1 + r)^n − 1) / r] × (1 + r)
Where P = monthly SIP, r = monthly return rate (annual rate ÷ 12), n = total months.
LTCG Tax on Equity Mutual Funds (Finance Act 2024)
Since Budget 2024, Long-Term Capital Gains (LTCG) on equity mutual funds held for more than 12 months are taxed at 12.5% (up from 10%) on gains exceeding ₹1.25 lakh per financial year. The first ₹1.25 lakh of gains annually is exempt. ELSS (tax-saving) funds have a mandatory 3-year lock-in.
Step-up SIP: The Wealth Multiplier
A step-up (or top-up) SIP increases your monthly contribution by a fixed percentage each year, in line with income growth. For example, starting at ₹5,000/month with a 10% annual step-up nearly doubles the corpus over 20 years compared to a flat SIP — because later years' larger contributions have compounding working in their favour.
Section 80C and ELSS Funds
SIP investments in ELSS (Equity Linked Savings Scheme) funds qualify for deduction under Section 80C up to ₹1.5 lakh per year. ELSS has a 3-year lock-in (the shortest among all 80C instruments) and historically delivers equity-level returns.
Frequently Asked Questions
Is SIP return guaranteed?
No. SIP returns are market-linked. The calculator uses assumed rates (8–15% p.a.) based on historical equity mutual fund performance. Actual returns will vary based on fund selection, market conditions, and your investment period.
What is the LTCG exemption limit for mutual funds in 2026?
For equity mutual funds, LTCG gains up to ₹1.25 lakh per year are exempt from tax. Gains above this are taxed at 12.5% (Finance Act 2024). This applies to units held for more than 12 months.
Should I choose a growth or IDCW (dividend) option for SIP?
For wealth creation, the Growth option is preferred — returns are reinvested and compounded. IDCW (formerly Dividend) payouts reduce the NAV and are taxed as income at your slab rate. Unless you need regular income, Growth is the better choice for long-term SIPs.
Can I pause or stop a SIP midway?
Yes. Most fund houses allow you to pause a SIP for 1–3 months or stop it entirely without penalty. Your accumulated corpus remains invested and continues to earn returns even after you stop contributions.