SWP Calculator

SWP is typically more tax-efficient than an FD monthly interest payout. FD interest is taxed in full at your slab rate, whereas only the gain portion of each SWP redemption is taxed as capital gains (short-term or long-term based on holding period). For equity-oriented SWPs, long-term capital gains up to ₹1.25 lakh per year are exempt and the excess is taxed at 12.5% (FY 2025-26 onwards) — far lower than slab rates of 20-30%. The trade-off is volatility: FD payouts are fixed and guaranteed, while SWP payouts come from a balance that fluctuates with the market. Conservative investors often blend the two — FD or SCSS for guaranteed baseline income, debt-fund SWP for tax-efficient top-up.

Only the gain portion of each SWP withdrawal is taxed — not the entire payout. Each redemption is treated as a part-sale of units, and the gain is calculated as redemption value minus the cost of those specific units (FIFO basis). For equity-oriented funds: gains on units held under 12 months are short-term (STCG, taxed at 20% from FY 2024-25 onwards), and gains on units held 12 months or longer are long-term (LTCG at 12.5% on annual gains above ₹1.25 lakh, FY 2025-26 onwards). For debt funds purchased after 1 April 2023, all gains are taxed at your slab rate regardless of holding period. The fund house issues a capital-gains statement at year-end that you use to report SWP gains in your ITR.

Yes — if your monthly withdrawal exceeds the return the remaining corpus earns each month, the balance shrinks and eventually depletes to zero. The depletion timeline depends on three things: the initial corpus, the monthly withdrawal amount, and the assumed rate of return. If you withdraw less than the corpus earns annually (for example ₹25,000/month from a ₹50 lakh corpus at 8% returns ₹4 lakh/year vs ₹3 lakh withdrawn), the balance actually grows over time and the SWP can run indefinitely. The calculator above shows you the exact depletion month for any combination — adjust the withdrawal amount until the corpus lasts as long as you need.

SIP and SWP are inverses. A SIP (Systematic Investment Plan) is for the accumulation phase — you contribute a fixed amount every month to build a corpus, and rupee-cost averaging plus compounding grows it over 10-30 years. An SWP (Systematic Withdrawal Plan) is for the distribution phase — you start with a corpus and withdraw a fixed amount every month for income, while the residual balance keeps earning. Many investors run SIPs through their working years to build the corpus, then convert that corpus into an SWP after retirement to generate a tax-efficient monthly income. Both can use the same mutual fund schemes; only the cash-flow direction changes.