Question 1

How is Mutual Fund SIP maturity wealth calculated?

Accepted Answer

SIP maturity value is calculated using the compound annuity formula: M = P x [((1 + i)^n - 1) / i] x (1 + i), where P is monthly investment, i is monthly expected return rate (Annual Return / 12 / 100), and n is total months invested.

Question 2

How are qualifying equity mutual-fund gains taxed in Tax Year 2026-27?

Accepted Answer

Under the Income-tax Act, 2025, qualifying long-term equity gains are covered by Section 198 and taxed at 12.5% above the annual ₹1.25 lakh threshold; qualifying short-term equity gains are covered by Section 196 and taxed at 20%. Holding-period, STT and fund-classification conditions must be checked.

Question 3

What is Rupee Cost Averaging in SIP investments?

Accepted Answer

A fixed-amount SIP buys more units at lower prices and fewer at higher prices, creating a weighted average purchase price across instalments. It does not necessarily lower cost versus a lump sum, prevent loss or improve returns; the result depends on the actual price path.

Question 4

How does a Step-Up SIP boost total wealth accumulation?

Accepted Answer

A Step-Up (or Top-Up) SIP increases the contribution on a chosen schedule. It can produce a larger projected corpus than a flat SIP, but the difference depends on the step-up rate, timing, tenure and assumed return. The projection is not a promise of future value.

Question 5

Are SIP returns guaranteed in Mutual Funds?

Accepted Answer

No. Mutual-fund SIP investments are market-linked. The return entered in this calculator is only a scenario assumption; actual returns can be lower or negative and will vary by scheme, costs, taxes and investment dates.

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SIP Investment Calculator

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