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Returns

12% a year. What is that actually worth?

After tax, and after inflation has taken its share of what's left.

Real return

₹
The balance will read ₹3,10,585 in 10 years. It buys what ₹1,58,730 buys today.
Balance will read
₹3,10,585
Real rate
4.73%
  • what it is really worth51%
  • taken by tax8%
  • taken by inflation40%
  • Quoted 12%
  • Inflation 6%
Valmonkvalmonk.com/real · not advice

The link carries your numbers, so whoever opens it sees this exact result. Nothing is saved on our side.

Your numbers, your assumptions. Not advice. We can't see the rest of your life. What that means.

₹1L

A lump sum, today

% a year

The headline number, before anything is taken off it

years

Inflation compounds too, so the gap widens with every year

What this assumes

All editable. Change one and the answer changes with it.

% a year

Indian CPI has run around 5 to 6% over the long run. It is an assumption you set, and nothing here forecasts it.

%

Charged on the whole nominal gain, because gains are not indexed for inflation. You are taxed on growth that inflation already took.

How this works, and where the numbers come from

Real return is not the return minus inflation

This is the commonest error in Indian money writing. At 12% against 6% inflation, subtracting gives 6.00%. The actual figure is 5.66%, because the two rates compound against each other rather than adding. Over one year that is nothing. Over thirty it is a different answer.

You are taxed on growth inflation already took

Tax is charged on the whole nominal gain. Capital gains are not indexed for inflation, so part of what you hand over is tax on growth that was never real. That is why the order matters here: tax comes off the gain first, and inflation comes off everything after.

Where a safe return quietly loses

A deposit at 7%, taxed at a 30% slab, nets 4.9%. Against 6% inflation that is a real return below zero. The balance still rises every year, which is exactly why the loss is invisible, and it is the case this tool exists to make visible.

Educational, not advice. Your numbers under assumptions you set.

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