A flat SIP ignores the fact that your income grows. Stepping it up by even 10% a year changes the outcome dramatically. This calculator shows the gap against a flat SIP and applies equity LTCG at 12.5% above the ₹1.25 lakh exemption.
The single highest-leverage change most investors can make: raise the SIP when the salary rises.
A flat SIP assumes your ₹10,000 today and your ₹10,000 in year 15 are equally affordable. They are not — inflation and salary growth make the later ones far easier. A 10% annual step-up roughly tracks a normal increment, so the pain stays constant while the contribution compounds.
The step-up gap is driven by two things: more money invested, and that money invested for long enough to compound. Contributions in the first five years do most of the compounding work, so a step-up started early is worth much more than one started late.
Equity gains above ₹1.25 lakh in a financial year are taxed at 12.5% after 12 months. Because SIP units are bought on different dates, each instalment has its own holding period — redeeming everything at once can produce a mix of long- and short-term gains. This calculator applies the simpler assumption that the whole gain is long-term, which is realistic for a 10-year-plus horizon.
The calculator does the arithmetic. TaxSphere — our free case-law library, 1,184 authorities and the Act in full — has the judgments, the circulars and the statutory text for the same provision.
