SWP Tax Deconstructor
See exactly how much tax you pay each year on SWP withdrawals — and why the early years can be nearly tax-free.
Who this is for
Retirees or near-retirees planning to draw a regular income from their mutual fund corpus using SWP. Most people don't realise how little tax they pay in the early years — this tool makes that visible and helps optimise withdrawal size.
SWP (Systematic Withdrawal Plan)
A facility to withdraw a fixed amount from your mutual fund every month. Unlike FD interest, you're redeeming units — so only the gain portion of each withdrawal is taxed, not the full amount.
LTCG exemption (₹1.25L)
Long-term capital gains up to ₹1.25L per year from equity funds are completely tax-free. In early SWP years when NAV hasn't grown much, gains per withdrawal may stay below this, resulting in ₹0 tax.
Cost basis / average NAV
The NAV (price per unit) at which you originally invested. Tax is only on the difference between your sale NAV and purchase NAV — not on the full withdrawal amount.
Your SWP Setup
Equity MF long-term: 10–12%. Debt MF: 6–8%.
Fund type
STCG 20% (yr 1), LTCG 12.5% with ₹1.25L/yr exemption (yr 2+)
Low / zero-tax years
1
of 10 years shown
Effective tax rate
2.89%
across all withdrawals
Total net received
₹58.3L
after all taxes
Corpus remaining
₹1.84Cr
after 10 years
Year-by-year tax breakdown
| Yr | Corpus | Withdrawn | Gain | Tax | Net |
|---|---|---|---|---|---|
| 1 | ₹1.00Cr | ₹6.0L | ₹59,459 | ₹11,892 | ₹5.9L |
| 2 | ₹1.05Cr | ₹6.0L | ₹1.1L | ₹0 | ₹6.0L |
| 3 | ₹1.11Cr | ₹6.0L | ₹1.6L | ₹4,536 | ₹6.0L |
| 4 | ₹1.17Cr | ₹6.0L | ₹2.0L | ₹9,970 | ₹5.9L |
| 5 | ₹1.24Cr | ₹6.0L | ₹2.4L | ₹14,866 | ₹5.9L |
| 6 | ₹1.31Cr | ₹6.0L | ₹2.8L | ₹19,277 | ₹5.8L |
| 7 | ₹1.40Cr | ₹6.0L | ₹3.1L | ₹23,251 | ₹5.8L |
| 8 | ₹1.49Cr | ₹6.0L | ₹3.4L | ₹26,831 | ₹5.7L |
| 9 | ₹1.59Cr | ₹6.0L | ₹3.7L | ₹30,056 | ₹5.7L |
| 10 | ₹1.71Cr | ₹6.0L | ₹3.9L | ₹32,961 | ₹5.7L |
Tax shown as ₹0 when LTCG gain is below the ₹1.25L annual exemption. Corpus end-of-year accounts for growth and withdrawal.