SWP Calculator

An SWP lets you withdraw a fixed amount from your mutual fund investment at regular intervals — usually monthly — while the remaining corpus stays invested and keeps growing. It is the mirror image of a SIP and is popular among retirees who want a steady, predictable cash flow from a lumpsum.

It depends on three things: the size of your corpus, your monthly withdrawal, and the return the corpus earns. If your withdrawals stay below the growth your corpus generates, it can last indefinitely. If you withdraw more than it earns, the balance shrinks each month and eventually depletes — this calculator shows exactly when.

Each SWP withdrawal is treated as a redemption, so only the gain portion of each instalment is taxed, not the full amount. For equity funds, gains on units held over 12 months are long-term and taxed at 12.5% above the ₹1.25 lakh annual exemption; units held under 12 months attract 20% short-term capital gains tax. This is far more tax-efficient than the fully-taxable interest from most fixed-income options.

A common rule of thumb is to withdraw around 4% of your corpus per year (roughly 0.33% a month) so it can last 25–30 years. In the Indian context, with equity-debt hybrid funds returning 8–10%, a 4–6% annual withdrawal is often sustainable, but lower is safer if you need the money to last through a long retirement.

For most investors, yes. An SWP gives you control over exactly how much you receive and is more tax-efficient, since only the gain in each withdrawal is taxed. Mutual fund dividends (IDCW) are taxed at your slab rate and are not guaranteed, while bank or FD interest is also fully taxable at slab rates.

For a retiree drawing regular income, lower-volatility options work best — balanced advantage, equity savings, or conservative hybrid funds smooth out the ride so you are not forced to redeem units during a sharp market fall. Pure equity funds can be used for a small, growth-oriented SWP over long horizons, but pairing the SWP with a debt or hybrid core protects your monthly cash flow.

For resident individuals, mutual funds do not deduct TDS on SWP redemptions — you are responsible for paying capital gains tax yourself when filing your return. This differs from FDs, where banks deduct TDS upfront. NRIs, however, do face TDS on mutual fund redemptions, deducted by the AMC at the applicable capital gains rate.

If your monthly withdrawal exceeds what the corpus earns, you start eating into principal — and a market downturn early in your SWP can accelerate depletion sharply (sequence-of-returns risk). Withdrawing 8–10% a year from an equity-heavy corpus can drain it in a bad decade. Keeping withdrawals near 4–6% and holding 1–2 years of expenses in liquid funds cushions against this.

Yes. An SWP is fully flexible — you can increase, decrease, pause, or stop the withdrawals anytime by instructing the AMC, and the remaining corpus stays invested. Many retirees raise the withdrawal amount every few years to keep pace with inflation, or pause it during strong markets to let the corpus grow.