Your withdrawal plan
Tax estimate (India)
Your result
Balance and money withdrawn by year
Year-wise breakdown
How an SWP works
You put a lump sum into a mutual fund and ask the fund to pay you a fixed amount every month (or quarter, or year). Each payment is made by selling just enough units at that day's NAV. The rest of your money stays invested, so it keeps earning while you withdraw. If the fund earns more than you take out, the balance can keep growing; if you take out more, it slowly runs down.
SWP formula
For a fixed withdrawal W at the end of each month, with a monthly return r, the balance after n months is B = P × (1 + r)n − W × [((1 + r)n − 1) ÷ r]. The calculator works month by month instead, so it can handle a yearly step-up, a delay before withdrawals start, quarterly or yearly payouts and the tax on each withdrawal.
Worked example: ₹50 lakh, ₹30,000 a month
₹50,00,000 in a fund earning 10% a year, with ₹30,000 taken out every month for 20 years:
| Plan | Result after 20 years |
|---|---|
| Fixed ₹30,000 a month | ₹72 lakh withdrawn and about ₹1.21 crore still invested |
| ₹30,000 rising 6% a year (to match inflation) | Money runs out after about 20 years 6 months |
| Highest fixed amount that lasts exactly 20 years | About ₹46,800 a month |
| Corpus needed for a fixed ₹30,000 a month for 20 years | About ₹32 lakh |
The step-up row shows why inflation matters: a withdrawal that keeps your buying power grows to about ₹96,000 a month by year 21, so a corpus that looked ample runs down quickly.
How SWP withdrawals are taxed (FY 2026-27)
Each withdrawal is partly your own money coming back and partly gain. Only the gain is taxed. Early on, most of each withdrawal is your own capital, so the tax is small.
| Fund type | Held up to 12 months | Held more than 12 months |
|---|---|---|
| Equity-oriented fund (65%+ in Indian shares) | 20% (STCG) | 12.5% (LTCG) on gains above ₹1.25 lakh a year |
| Debt fund bought on or after 1 April 2023 | Added to your income and taxed at your slab rate, however long you hold | |
A 4% health and education cess is added on top. Budget 2026 did not change these rates. Check your own case with a tax adviser, especially if you have other capital gains in the same year.
Tips for a safer SWP
- Keep the first-year withdrawal rate modest. Around 4–5% of the corpus a year leaves room for bad years; 8% or more depends on strong returns.
- Hold one to two years of withdrawals in a liquid or short-term debt fund, so you do not have to sell equity after a market fall.
- Start the SWP at least a year after investing in an equity fund to avoid the 20% short-term rate and the exit load many equity funds charge in the first year.
- Review the plan every year and raise the withdrawal only if the corpus is on track.
Frequently asked questions
What is an SWP (systematic withdrawal plan)?
An SWP tells your mutual fund to sell units worth a fixed amount on a set date, every month, quarter or year, and pay the money into your bank account. The units that are not sold stay invested and keep earning. It works like a SIP in reverse and is often used to create a monthly income after retirement.
How is SWP taxed in India in FY 2026-27?
Only the gain part of each withdrawal is taxed, not the whole amount. For equity mutual funds, gains on units held up to 12 months are taxed at 20% (STCG). Gains on units held longer are taxed at 12.5% (LTCG) on the amount above ₹1.25 lakh in a financial year. For debt funds bought on or after 1 April 2023, gains are taxed at your income-tax slab rate. A 4% cess is added; surcharge may apply on high incomes.
How long will my money last with an SWP?
It depends on the withdrawal rate and the return. If your yearly withdrawal is less than what the fund earns, the corpus can last indefinitely. With ₹50 lakh earning 10% a year, a fixed ₹30,000 a month is still growing after 20 years, but if you raise the withdrawal by 6% every year for inflation the money runs out in about 20 years and 6 months.
How much can I withdraw every month from ₹50 lakh?
At an assumed 10% yearly return, about ₹46,800 a month lasts exactly 20 years with nothing left at the end. To keep the corpus intact, or to raise the withdrawal each year with inflation, you have to take less. Use the Max monthly withdrawal mode to try your own numbers.
Why is my result different from Groww, Zerodha or a fund house calculator?
Many sites turn a 10% yearly return into a 10% ÷ 12 monthly rate, which actually compounds to about 10.47% a year. This calculator uses the true monthly equivalent of the yearly return by default. Switch Rate method to Annual ÷ 12 to match those sites.
Is SWP better than the IDCW (dividend) option?
With an SWP you choose the amount and the date, and you are taxed only on the gain part of each withdrawal. IDCW payouts are decided by the fund, are not guaranteed, and the whole payout is added to your income and taxed at your slab rate. For a steady income, an SWP is usually more predictable and tax-efficient.