Calculator
Post-Tax Return Calculator
Your gross return and your actual in-hand return are often very different numbers. Model the after-tax outcome for equity LTCG, equity STCG, debt mutual funds, and fixed deposits under India's current tax regime.
Enter the return before any taxes. For FDs, this is the interest rate. For equity, this is the assumed CAGR.
Determines which tax rules apply under Indian income-tax law.
For equity LTCG, holding > 12 months qualifies. This models end-of-period lump redemption.
Tax rate: 12.5% on gains above ₹1.25 lakh annual exemption (post-Budget 2024). Simplified here as 12.5% on gains above ₹1.25L.
Return comparison
Why post-tax return matters more than gross return
Investment returns are almost always quoted gross of taxes. A mutual fund fact sheet showing a 15% CAGR over 10 years is showing pre-tax performance. The actual rupees you receive at redemption depend on which tax category applies, your income tax slab, and the holding period. Two investments with the same pre-tax return can yield dramatically different after-tax outcomes depending on how they are classified under the Income Tax Act.
This is particularly important in India because the tax treatment of different instruments has changed significantly in recent Union Budgets, making comparisons that held true even three years ago potentially obsolete today.
The Indian capital gains tax framework (post-Budget 2024)
Budget 2024 overhauled capital gains tax rates across asset classes. The key changes that took effect from July 23, 2024:
- Equity LTCG: Rate raised from 10% to 12.5%. Annual exemption raised from ₹1 lakh to ₹1.25 lakh. Holding period: more than 12 months.
- Equity STCG: Rate raised from 15% to 20%. Holding period: 12 months or less.
- Unlisted equity and non-equity assets (LTCG): Rate changed to 12.5% without indexation (previously 20% with indexation for many asset classes).
- Debt MFs: Remain at slab rates as per the April 2023 change.
Equity LTCG — the ₹1.25 lakh exemption
The ₹1.25 lakh annual LTCG exemption applies to the aggregate of all long-term capital gains from equity instruments in a financial year — shares, equity mutual funds, equity ETFs, and equity REITs. It is not per investment or per fund; it is a single aggregate threshold. For small investors with modest equity holdings, this exemption can shelter a significant portion of annual gains. For larger portfolios or those accumulating for decades, the tax at 12.5% above this exemption is the key number to model.
This calculator simplifies by deducting the ₹1.25L exemption from total gains and applying 12.5% on the remainder. In reality, the exemption resets each financial year, so spreading redemptions across years can optimise the tax outcome — a planning decision for you and your adviser.
Debt MFs vs FDs — the post-2023 comparison
Before April 2023, debt mutual funds with a 3-year holding period offered 20% tax with indexation on long-term gains. This was often significantly lower than the slab rates on FD interest, making debt MFs tax-efficient for investors in the 20% and 30% slabs. The Finance Act 2023 removed this advantage entirely — all debt MF gains are now taxed at slab rates regardless of holding period.
The net result: for investors in the 30% slab, debt MFs no longer offer a tax advantage over FDs (both are taxed at 30%). Liquid funds and short-duration debt funds may still offer some liquidity and return advantages over FDs, but the stark tax differential that existed earlier is gone. This calculator helps you quantify the after-tax difference across your specific situation.
Old regime vs new regime — impact on debt and FD returns
Since debt MFs and FDs are taxed at slab rates, your choice between the old and new income tax regime matters. The new regime (which became the default from FY 2023-24) has lower slab rates for most income brackets — 5% up to ₹7 lakh (after the ₹50,000 standard deduction), then 10%, 15%, 20%, 25%, and 30%. The old regime, with fewer slabs but more deductions, may result in lower or higher effective rates depending on individual deductions. This calculator lets you enter any applicable marginal rate, allowing you to model both regimes.
What this calculator does not model
- Surcharge and health & education cess (4%): Effective tax rate for high-income individuals is higher. The marginal rate for income above ₹5 crore is effectively ~35.88% after surcharge and cess.
- Rebate under Section 87A: Individuals with net taxable income up to ₹7 lakh under the new regime (and ₹5 lakh under the old regime) get a full tax rebate. STCG and LTCG may or may not be eligible for this rebate depending on the regime and total income — this is complex and not modelled.
- Cost inflation index (CII) for real estate and unlisted assets:Indexation was removed for most assets by Budget 2024. Old rules may apply for assets acquired before July 23, 2024 under transitional provisions.
- STT (Securities Transaction Tax): LTCG and STCG rates on equity apply only to instruments where STT was paid. This is almost always satisfied for listed equity trades through Indian exchanges.
This page is educational only and does not constitute tax or investment advice. Tax laws are subject to amendment; always refer to the latest Finance Act and consult a qualified tax professional or SEBI-registered investment adviser for personalised guidance. Past returns are not indicative of future results.