SWP Tax Calculator India — FY 2025-26
Calculate tax on Systematic Withdrawal Plan (SWP) from mutual funds. FIFO cost basis breakdown, equity LTCG 12.5% vs debt slab rate, ₹1.25L annual exemption, and SWP vs FD tax comparison. Updated for FY 2025-26.
How to Use This Calculator
SWP Tax Calculator tab
Select your mutual fund type (equity, debt, or hybrid), enter your total investment (cost basis), current value, monthly SWP amount, and holding period. The calculator computes each withdrawal's FIFO cost basis, gain portion, and tax. It shows per-withdrawal breakdown, annual tax liability, and total tax over the SWP tenure. Equity MF gains are taxed at 12.5% LTCG (above ₹1.25L exemption) or 20% STCG. Debt MF gains are taxed at your slab rate.
SWP vs FD Income tab
Compare the same corpus generating monthly income via FD interest vs SWP. FD interest is 100% taxable at slab rate. SWP: only the gain portion is taxed. See the massive tax saving side by side — monthly tax, annual tax, and total tax over the tenure.
Tax-Free SWP Strategy tab
For equity mutual funds held >12 months: calculate the maximum monthly SWP where annual LTCG stays within the ₹1,25,000 exemption — resulting in zero tax. Enter your portfolio details and see exactly how much you can withdraw monthly without paying any tax.
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The Formulas
SWP tax depends on the fund type, holding period, and how much of each withdrawal is gain vs principal. The FIFO method determines cost basis.
Each SWP withdrawal = Principal Portion + Gain Portion
Cost Basis = Units Redeemed × Purchase NAV (FIFO: oldest units first)
Gain Portion = Withdrawal Amount − Cost Basis
Principal Portion = Cost Basis → tax-free
Equity MF Tax (≥65% equity, FY 2025-26):
LTCG (>12 months): 12.5% flat rate (Section 112A)
Annual LTCG exemption: ₹1,25,000 per FY (shared across all equity LTCG)
STCG (≤12 months): 20% flat rate (Section 111A)
Debt MF Tax (<65% equity, FY 2025-26):
ALL gains: taxed at income slab rate (5%/10%/20%/30%)
No LTCG benefit. No indexation. Section 50AA (Finance Act 2023).
Hybrid MF Tax:
≥65% equity → equity MF rules (LTCG 12.5% / STCG 20%)
<65% equity → debt MF rules (slab rate)
Tax-Free SWP Strategy (Equity MF):
Max monthly SWP = ₹1,25,000 / (12 × Gain Ratio)
where Gain Ratio = (Current NAV − Purchase NAV) / Current NAV
If annual gains ≤ ₹1,25,000, tax = ₹0
Key rules (FY 2025-26):
No TDS on mutual fund redemptions for resident Indians
FIFO applied automatically by AMC
₹1.25L LTCG exemption shared across stocks + equity MF
Debt MF: no LTCG benefit since FY 2023-24 (Section 50AA)
The critical insight: SWP is far more tax-efficient than FD interest because only the gain portion is taxed, not the full withdrawal. For equity MF, the first ₹1.25L of annual gains is completely tax-free.
Example
Rajesh — ₹20,00,000 in Equity MF, SWP of ₹20,000/month, FY 2025-26
Rajesh invested ₹20,00,000 in an equity mutual fund 2 years ago. Current value: ₹28,00,000. He starts SWP of ₹20,000/month. He is in the 30% tax bracket.
Step 1: Determine Gain Ratio
Step 2: Monthly SWP Tax Breakdown
Step 3: Tax Calculation (Equity MF LTCG)
Step 4: Compare with FD
Key insight: Rajesh withdraws ₹20,000/month via equity MF SWP and pays zero tax because his annual LTCG (₹68,571) is within the ₹1.25L exemption. If he used FD instead, he would pay ₹43,500/year in tax on interest. SWP saves him ₹43,500/year — and his corpus continues to grow in the equity fund.