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SWP Calculator India — FY 2025-26

Calculate how long your mutual fund corpus lasts with monthly SWP withdrawals, compare SWP vs FD tax efficiency, and find your sustainable withdrawal rate for retirement. Updated with Finance Act 2024 LTCG rates and RBI repo rate 5.25%.

Your current mutual fund investment value
Amount you want to withdraw every month
%
Equity: ~12%, Hybrid: ~10%, Debt: ~7-8%
Affects tax calculation. Equity/hybrid: LTCG 12.5%. Debt: slab rate.

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How to Use This Calculator

SWP Plan tab

Enter your total mutual fund corpus, desired monthly withdrawal, and expected annual return. The calculator simulates month-by-month withdrawals and shows how long your corpus lasts, remaining balance at 5/10/15/20/25/30 year milestones, and estimated annual LTCG tax. Use this to plan your retirement income or regular cash flow from investments.

SWP vs FD tab

Compare the same corpus invested in an equity-oriented hybrid mutual fund (SWP) versus a Fixed Deposit. See the tax difference: SWP withdrawals are taxed only on the gains portion at 12.5% LTCG, while FD interest is 100% taxable at your slab rate. The calculator shows annual tax savings, post-tax income, and corpus projection for both options.

Sustainable Withdrawal Rate tab

Enter your retirement corpus, expected portfolio return, and desired duration (e.g. 30 years). The calculator finds the maximum monthly withdrawal that makes your corpus last exactly that long. It also shows a scenario table for different withdrawal rates (3% to 8%) so you can see the trade-off between monthly income and corpus longevity.

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The Formula

SWP is simulated month-by-month. Each month, the corpus grows by the monthly return rate, then the withdrawal amount is deducted:

Monthly SWP Simulation:
Balancen = Balancen-1 × (1 + r) − W

Where:
Balancen = Corpus balance after month n
r = Monthly rate of return (annual rate / 12 / 100)
W = Monthly withdrawal amount

Sustainable Withdrawal (PMT formula):
W = PV × r × (1 + r)n / [(1 + r)n − 1]

Where:
PV = Present value (corpus)
r = Monthly rate of return
n = Total months
W = Maximum monthly withdrawal for corpus to reach zero at month n

SWP Tax (FY 2025-26):
Each SWP withdrawal = partial redemption. Only gains portion is taxable.
Equity/Hybrid MF (held > 1 year): LTCG 12.5% on gains above ₹1,25,000/year
Equity/Hybrid MF (held < 1 year): STCG 20% on entire gains
Debt MF (post April 2023): Gains taxed at income slab rate, no indexation
FD interest: 100% taxable at income slab rate (TDS under Section 194A)

The key insight: in an SWP withdrawal of ₹30,000, if the cost basis of redeemed units is ₹24,000 and current value is ₹30,000, only ₹6,000 (the gains) is taxable. The remaining ₹24,000 is your own principal returning to you tax-free. This is why SWP is dramatically more tax-efficient than FD interest.

Example

Rajesh — Retired banker in Pune, ₹50 lakh corpus, ₹30,000/month SWP

Rajesh retired at 60 with ₹50,00,000 in a balanced advantage fund. He starts an SWP of ₹30,000/month, expecting 9% annual returns. He wants to know: how long will his corpus last, and how much tax does he save vs an FD?

Step 1: SWP Plan calculation

Initial corpus₹50,00,000
Monthly withdrawal₹30,000
Annual return9%
Annual withdrawal rate7.2% of corpus

Step 2: Corpus projection

After 10 years₹37.8 lakh remaining
After 20 years₹14.6 lakh remaining
Corpus lasts~27 years (till age 87)
Total withdrawn₹97.2 lakh over 27 years

Step 3: SWP vs FD tax comparison (annual)

FD interest at 7%₹3,50,000/year
Tax on FD at 30% slab₹1,05,000
SWP gains portion (est.)₹1,50,000/year
LTCG after ₹1.25L exemption₹25,000 taxable
LTCG tax at 12.5%₹3,125
Annual tax saving₹1,01,875

Rajesh's ₹50 lakh corpus supports ₹30,000/month for 27 years via SWP. He saves over ₹1 lakh per year in taxes compared to an FD. Over 20 years, that is ₹20+ lakh in tax savings alone.

FAQ

SWP (Systematic Withdrawal Plan) is the exact opposite of SIP (Systematic Investment Plan). While SIP involves investing a fixed amount into a mutual fund every month, SWP involves withdrawing a fixed amount from your existing mutual fund corpus every month. The fund house redeems the required number of units each month using the FIFO (first-in, first-out) method. Your remaining corpus stays invested and continues to earn market-linked returns. SWP is essentially a way to create a regular monthly income stream from your mutual fund investments, making it popular among retirees.
No, the full withdrawal amount is not taxable. Each SWP withdrawal is a partial redemption of mutual fund units. Only the gains portion (the difference between the redemption value and the cost basis of redeemed units) is taxable as capital gains. For example, if you withdraw ₹30,000 and the cost basis of the redeemed units is ₹24,000, only ₹6,000 is taxable. For equity and hybrid funds held over 1 year: LTCG at 12.5% on gains above ₹1,25,000/year. For holdings under 1 year: STCG at 20%. For debt funds (post April 2023): gains taxed at your income slab rate with no indexation benefit.
Two key reasons. First, with FDs, 100% of interest is taxable at your income slab rate (up to 30%). With SWP, only the gains portion of each withdrawal is taxed — the principal portion returns to you tax-free. Second, equity fund SWP gains are taxed at a flat 12.5% LTCG rate (much lower than 30% slab), and the first ₹1,25,000 of annual LTCG is completely exempt. For someone in the 30% tax slab with a ₹50 lakh corpus, this difference can mean saving ₹80,000–₹1,00,000+ in taxes every year. Over a 20-year retirement, that adds up to ₹16–20 lakh in tax savings.
The 4% Rule comes from the Trinity Study (US, 1998), which found that withdrawing 4% of your retirement corpus annually (adjusted for inflation each year) gives a high probability of the corpus lasting 30 years. However, this was based on US inflation of 2–3%. India has higher inflation (5–6%), which erodes purchasing power faster. Indian financial planners generally recommend a more conservative 3.5–5% withdrawal rate. The actual safe rate depends on your portfolio composition (equity vs debt), expected returns, and retirement duration. Use the Sustainable Withdrawal Rate tab to calculate your specific number.
For tax-efficient SWP, equity-oriented hybrid funds (balanced advantage funds, aggressive hybrid funds) are the most popular choice. These funds maintain 65%+ equity allocation, which qualifies them for equity taxation (12.5% LTCG vs slab rate for debt). They also have lower volatility than pure equity funds due to the debt component. Popular options include ICICI Prudential Balanced Advantage, HDFC Balanced Advantage, and SBI Balanced Advantage. For conservative investors who prioritize stability over tax efficiency, short-duration debt funds or liquid funds can be used, though post-FY 2023-24, debt fund gains are taxed at slab rate (no indexation).

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