About the SIP LTCG Tax Calculator
This SIP LTCG tax calculator estimates the capital gains tax you would pay if you redeem your entire equity mutual fund SIP corpus at maturity. It projects the SIP value from your monthly amount, expected return, period and optional step-up, then splits the gain instalment by instalment: units bought more than 12 months before redemption give long-term capital gains (LTCG), while the last 12 instalments are still short-term (STCG).
It uses the rates for equity-oriented funds in force since 23 July 2024, which continue to apply for FY 2026-27 (the first year under the new Income-tax Act, 2025, which renumbered the old sections but kept these rates): LTCG (Section 112A of the 1961 Act) is taxed at 12.5% on gains above ₹1.25 lakh a year, and STCG (Section 111A) at 20%, plus 4% health and education cess. Surcharge for very high incomes and grandfathering of pre-2018 gains are not included. All rates are editable, so you can model future changes.
It is useful for planning a large redemption, comparing a lump-sum withdrawal with spreading redemptions over several financial years to reuse the ₹1.25 lakh exemption, and seeing your real after-tax corpus. Debt fund gains on units bought after 1 April 2023 are taxed at slab rates, so this tool is meant for equity and equity-oriented hybrid funds.
With the default inputs, the total capital gains tax is ₹406,330.08. Change any value above to recalculate instantly.
How to use the sip ltcg tax calculator
- 1Enter your monthly SIP, expected annual return and investment period.
- 2Add a yearly step-up if you increase the SIP every year.
- 3Check the exemption and tax rates — reduce the exemption if you have already used part of it this year.
- 4Review the split between long-term and short-term gains and the total tax.
- 5Compare the after-tax value with the maturity value to plan your redemption.
Formula and method
The SIP is projected with instalments at the start of each month compounding at the annual return ÷ 12. On redemption, each instalment is its own purchase: its gain is its value at maturity minus the amount invested. Instalments held for more than 12 months produce long-term gains; the most recent 12 instalments produce short-term gains.
The Section 112A exemption (₹1.25 lakh per financial year) is deducted from long-term gains only, and the remainder is taxed at the LTCG rate. Short-term gains are taxed at the Section 111A rate with no exemption. When the cess option is on, 4% health and education cess is added to both. Surcharge, rebates for low incomes and any other equity gains you realise in the same year are not modelled.
- LTCG
- Gains on instalments held more than 12 months
- STCG
- Gains on instalments held 12 months or less
- 1.04
- Adds 4% health and education cess
Worked examples
₹10,000 SIP for 15 years at 12%, fully redeemed
The SIP grows to about ₹50.46 lakh on ₹18 lakh invested. The last 12 instalments (₹1.2 lakh) have gained only about ₹8,093, taxed as STCG at 20% plus cess (₹1,683). The remaining ₹32.38 lakh of long-term gains, minus the ₹1.25 lakh exemption, is taxed at 12.5% plus cess — about ₹4.05 lakh. Total tax is roughly ₹4.06 lakh.
₹5,000 SIP for 5 years at 12%, without cess
Five years of ₹5,000 SIPs grows to about ₹4.12 lakh with ₹1.12 lakh of gain. About ₹1.08 lakh is long-term, which is under the ₹1.25 lakh exemption, so there is no LTCG tax at all; only the ₹4,047 short-term gain on the final year is taxed at 20% (₹809).
Frequently asked questions
How is LTCG on SIP calculated?+
Each SIP instalment is treated as a separate purchase with its own purchase date. When you redeem, units are sold on a first-in, first-out basis, and only units held for more than 12 months qualify for long-term capital gains treatment.
What is the LTCG tax rate on equity mutual funds?+
For transfers on or after 23 July 2024, long-term gains on equity-oriented mutual funds are taxed at 12.5% under Section 112A on gains above ₹1.25 lakh in a financial year, plus 4% cess and any applicable surcharge.
What is the STCG rate on equity mutual funds?+
Short-term gains on equity-oriented funds held 12 months or less are taxed at 20% under Section 111A for transfers on or after 23 July 2024, plus cess. There is no exemption for short-term gains.
How can I reduce tax on SIP redemption?+
Redeem in stages across financial years to use the ₹1.25 lakh LTCG exemption each year, avoid selling instalments that are less than a year old, and consider harvesting gains up to the exemption every year by selling and reinvesting.
Are debt fund SIPs taxed the same way?+
No. Gains on debt mutual fund units bought on or after 1 April 2023 are taxed at your income tax slab rate regardless of holding period, with no indexation. This calculator is designed for equity funds.
Is ELSS taxed differently?+
ELSS gains are taxed like other equity funds, but each instalment is locked in for three years, so every unit you can redeem is already long-term. The ₹1.25 lakh exemption and 12.5% rate apply.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.