Picture this: you punch ₹10,000 monthly SIP for 20 years into a calculator, and it proudly flashes “₹1 Crore.” You feel great. Then reality hits—taxes take a big slice of that profit, and most calculators don’t even mention it.
I’ve seen so many investors get excited about these gross numbers, only to be disappointed later. This guide is here to help you see the real picture—what you’ll actually have in hand after the government takes its share.
1. The “1 Crore” Dream That Isn’t Quite Real
When you finally redeem your mutual fund units after years of patient investing, only the profit part gets taxed. If you plan based on the full amount shown by most calculators, you might end up short for big goals like your child’s college fees or that dream home down payment.
First, See Your Gross Amount
Let’s start with the exciting number—use our regular SIP calculator to see the total before tax.
Open SIP Calculator2. The New 2025 Tax Rules (12.5% LTCG)
After the Union Budget 2024 changes, here’s how equity mutual funds are taxed now:
- If you sell within 1 year: 20% tax on gains (short-term)
- If you hold longer than 1 year: 12.5% tax on gains (long-term)
- Tax-free allowance: Up to ₹1.25 lakh of gains per financial year—no tax!
For the latest official rules, always check the Income Tax Department website.
Remember—this tax applies only to the profit portion.
3. A Real-Life Example: The Tax Bite
Let’s run a common scenario so you can see the difference for yourself.
Your inputs:
- Monthly SIP: ₹10,000
- Time period: 20 years
- Expected return: 12% p.a.
| Component | Amount |
|---|---|
| Total amount you invested | ₹24,00,000 |
| Gross maturity value | ₹99,91,479 (~₹1 Crore) |
| Total profit/gains | ₹75,91,479 |
| Tax-free allowance | - ₹1,25,000 |
| Taxable gains | ₹74,66,479 |
| Tax you’ll pay (12.5%) | ₹9,33,310 |
| What you actually get | ₹90,58,169 |
Want the Exact Tax Number?
Skip the manual math—use our dedicated mutual fund tax calculator.
Calculate MF Tax4. Step-by-Step: How to Calculate Your Take-Home Amount
When you’re planning for real goals, here’s the simple process I recommend:
- Find the gross corpus using any SIP calculator.
- Separate your gains—just subtract the total money you invested from the maturity value.
- Apply the tax—subtract ₹1.25 lakh from the gains, then take 12.5% of what’s left.
- Adjust for inflation too—even ₹90 lakh in 20 years won’t feel like ₹90 lakh today. Use our inflation calculator to see the real purchasing power.
Wrapping it up
SIPs are still one of the smartest ways to build wealth—taxes don’t change that. But ignoring them can leave you short. My advice? Always aim for a corpus that’s about 10–15% higher than what you think you need, just to cover the tax part comfortably.