Enter your investment, the return you expect and inflation. This real return calculator shows your real rate of return and what your corpus will actually buy in today’s rupees.
Real Return Calculator
See how inflation, and optionally tax, shrink the growth of a SIP or lump sum.
Your result in detail
| Item | Amount |
|---|
How different inflation rates change the result
| Inflation | Real return per year | Corpus in today’s rupees (₹) |
|---|
Illustrative estimates. The return is treated as an effective yearly return, and tax is a flat rate on total gains at the end. Actual results vary.
Your investment earns 12% a year, and prices rise 6% a year. So how fast does your buying power grow? Not 12%, but about 5.7%. A real return calculator shows the number that actually matters.
How do you use this real return calculator?
- Enter your monthly SIP, a lump sum, or both.
- Set how many years you will stay invested.
- Enter the yearly return you expect before inflation. Pick a number you can defend, not the highest one you have heard.
- Enter the inflation you expect over the same period.
- Add a tax rate on gains if you want an after-tax view, or leave it at 0.
- Press Calculate, then read the real return, the corpus in today's rupees and the inflation table. Use Copy result to save a summary.
Stock Charcha built this real return calculator to show two corpus numbers side by side, because the rupees you will hold and the rupees you can spend are not the same thing.
How does the real return calculator work out the real return?
It uses the standard formula, which divides your growth by inflation instead of simply subtracting it.
Real return = (1 + nominal return) ÷ (1 + inflation) − 1
To show your corpus in today's rupees, the calculator divides the future corpus by (1 + inflation) raised to the number of years. It treats the return as an effective yearly return and each SIP instalment as invested at the start of the month.
What does a worked example look like?
Take a ₹10,000 SIP for 20 years at an illustrative 12% return with 6% inflation and no tax.
| Item | Amount |
|---|---|
| Total invested | ₹24,00,000 |
| Corpus in future rupees | ₹91,98,574 |
| Corpus in today's rupees | ₹28,68,159 |
| Buying power lost to inflation | ₹63,30,415 |
The real return is 5.66% a year. The corpus looks like ₹91,98,574, but it will buy what about ₹28,68,159 buys today. Put differently, inflation removes about 69% of that future corpus's buying power. These figures are illustrative, not a promise.
Why is real return not just return minus inflation?
Subtracting is a handy shortcut, but it is slightly off. Here is how far the shortcut drifts as the numbers grow.
| Nominal return | Inflation | Subtracting | Correct real return |
|---|---|---|---|
| 12% | 6% | 6.00% | 5.66% |
| 8% | 6% | 2.00% | 1.89% |
| 5% | 6% | -1.00% | -0.94% |
| 15% | 8% | 7.00% | 6.48% |
The shortcut drifts further from the truth as rates rise, so use the formula when it matters.
How much does inflation change your real return calculator result?
Here is the same SIP at different inflation rates, with a 12% return.
| Inflation | Real return per year | Corpus in today's rupees |
|---|---|---|
| 4% | 7.69% | ₹41,98,109 |
| 5% | 6.67% | ₹34,66,846 |
| 6% | 5.66% | ₹28,68,159 |
| 7% | 4.67% | ₹23,77,086 |
| 8% | 3.70% | ₹19,73,537 |
Each extra point of inflation takes a visible bite out of what the corpus can buy. Test a higher rate than you expect, because that is the safer way to plan. Stock Charcha suggests entering your own inflation estimate instead of a headline national figure.
What happens when your return barely beats inflation?
Take ₹1,00,000 invested once for 10 years at an illustrative 4%, with 6% inflation. It grows to ₹1,48,024 in rupees, but only buys what ₹82,656 buys today. The real return is −1.89% a year, so you gain rupees and lose buying power.
This is a hypothetical return, not a statement about any specific product. It shows why the real return calculator matters most for low-return choices.
Does tax change the real return?
Yes. With an illustrative 10% tax on gains, the 20-year SIP example above falls from ₹28,68,159 to ₹26,56,176 in today's rupees. Tax rules differ by asset and holding period, so check the Income Tax Department website as of today before you enter a rate.
What does this real return calculator leave out?
It does not deduct the fund's expense ratio, so enter a net return. Inflation also differs from person to person, and official figures from sources such as the RBI describe an average. Tax is a flat rate on total gains at the end, with no exemptions or yearly deductions.
Real returns will not arrive in a straight line either. Mutual fund investments are subject to market risks. Read all scheme related documents carefully before investing. At Stock Charcha we would rather show a cautious number than a flattering one.
Where should you go after using the real return calculator?
To plan for a goal in future prices, try our goal-based SIP calculator. To see what fund costs do, use the expense ratio impact calculator.
New to SIPs? Start with what is SIP in mutual funds, then browse the types of mutual funds. Then rerun the real return calculator with a higher inflation rate and see whether your plan still works.
Founder of Stock Charcha. Stock market enthusiast, actively investing since November 2022. About the author
Educational content only. This page is not personalised financial advice. Please do your own research or speak to a SEBI-registered adviser before investing, and read our disclaimer.
Frequently asked questions
What is a good real return?
Any real return above zero grows your buying power. For long-term goals you usually want it comfortably above zero, so compare your expected return with the inflation that applies to your own goal, not only with the headline rate.
Which inflation rate should I use?
Use the rate that matches your own spending or your goal, because education and medical costs can rise at a different pace from general prices. Official figures give a baseline, and a slightly higher estimate is a safer way to plan.
Is real return the same as post-tax return?
No. Real return removes the effect of inflation, while post-tax return removes tax. This calculator can apply both: enter your tax rate on gains and your inflation rate to see the corpus in today's rupees after tax.
Can I use the real return calculator for fixed deposits?
Yes. Enter the deposit rate as your return and your tax rate as the tax on gains. FD interest is usually taxed every year, so the flat tax at the end is only an approximation of the true after-tax result.
Is the real return calculator result guaranteed?
No. Returns and inflation both change from year to year, and the calculator assumes one steady rate for each. Treat the figures as a planning estimate and test a lower return and a higher inflation rate.