SWP calculator

What an SWP is

A Systematic Withdrawal Plan is a standing instruction with a mutual fund house to redeem a fixed rupee amount from your units on a chosen day each month. The redemption cancels units at that day's Net Asset Value, the money is credited to the bank account on file, and the rest of the holding stays invested and keeps earning at the scheme's rate.

An SWP is not a monthly interest payment. The scheme does not promise a fixed sum. The arithmetic on this page is a cash-flow simulation. It takes the withdrawal first, then grows the leftover for a month, and repeats until the balance reaches zero or a 100-year cap is hit.

The convention this page uses

The convention mirrors the SIP calculator. The month runs like this: on the first day, redeem the stated rupee amount from the balance. On the last day, apply one month of return to whatever is left, using the annual rate divided by 12. The next month starts with that new balance. If the balance falls below the withdrawal amount on any first day, the plan takes the remaining balance and stops.

Compounding is monthly at annual divided by 12. The result tracks a steady rate; a real fund will not deliver one. For a year that rises each anniversary of the plan, the page lifts the withdrawal by the step rate, holds the new amount for 12 months, lifts again, and so on.

Worked example you can check

Take ₹50,00,000 as the starting corpus, an assumed 8 per cent annual return and a monthly withdrawal of ₹40,000 with no yearly rise. The monthly rate is 8 divided by 1,200, or 0.00667. The arithmetic from month one looks like this.

The corpus lasts about 22 years and 1 month, during which about ₹1,05,90,269 is withdrawn.

The yearly step-up

Expenses rarely stand still, so the second row on the page lets the withdrawal rise by a set percentage every 12 months. On ₹50,00,000 at 8 per cent, a flat ₹25,000 a month hardly dents the corpus: the monthly return in the first month on the leftover balance is about ₹33,167, so the balance grows and the 100-year cap is hit without depletion. The same ₹25,000 with a 5 per cent yearly rise reaches about ₹63,174 a month in year 20 and the corpus runs out in about 24 years and 2 months.

Read both lines on the comparison chart. A step-up is not free. It raises the total withdrawn over the plan, but the later months are bigger, so the fund takes bigger redemptions when fewer units remain. If the market weakens near the end of the plan, bigger late redemptions hit it harder.

What the corpus can support, in reverse

Switch tabs and the arithmetic runs the other way: given a corpus, a term and an assumed return, what flat monthly withdrawal would leave zero at the end? The closed form used is the annuity-due present value: the corpus is the sum of the monthly amounts discounted back at the monthly rate, with the first instalment taken at the start of the term. The expression is monthly W equal to the corpus divided by the quantity (one minus one plus i, raised to minus n) divided by i, times one plus i, where i is the annual rate divided by 12 and n is the term in months.

For ₹50,00,000 at 10 per cent for 20 years, that gives about ₹47,852 a month. This is the amount that leaves exactly zero on the last day at the steady rate, which is a fragile answer: a weak first few years, or a withdrawal set higher than this, can exhaust the corpus early. Many plans set the withdrawal lower than the closed-form figure as a cushion.

Tax on each withdrawal

Each SWP instalment is a partial redemption of units, not a distribution. Capital gains are computed per unit redeemed on a First-In First-Out basis, in the type of fund the units sit in. For an equity-oriented fund (65 per cent or more domestic equity), units held above 12 months are long-term, taxed at 12.5 per cent above a combined yearly exemption of ₹1,25,000 on listed equity and equity funds; units held 12 months or less are short-term at 20 per cent. The 12.5 per cent long-term rate and 20 per cent short-term rate on equity funds have run since transfers on or after 23 July 2024, and the Income-tax Act 2025 that came into force on 1 April 2026 preserves them.

Units of debt mutual funds bought on or after 1 April 2023 are taxed at your slab rate, with no indexation, whatever the holding period. Any surcharge due is capped at 15 per cent for capital gains income, and health and education cess at 4 per cent then applies on tax plus surcharge. Your own surcharge band and other income heads sit outside this page. A qualified chartered accountant can place the final figure for your return.

What this calculator leaves out

• The scheme's expense ratio, which reduces the return actually credited to the units. Direct plans cost less than regular plans.
• Any exit load on units sold inside the scheme's no-load period, which this page assumes to be zero.
• A return that changes from year to year. The arithmetic runs at one steady rate.
• Topping up the corpus, or pausing a withdrawal. The plan is assumed to run every month as set.
• Your surcharge, cess and other income heads. The tax paragraph is a sketch, not an assessment.

For a corpus whose balance never depletes on these inputs, the page prints a note and stops the loop at 100 years. Raise the withdrawal or lower the assumed return to see a depletion year.

Frequently asked questions

Courses that teach the subject behind the sWP calculator