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Real Return Calculator
Interest minus tax minus inflation equals your actual gain. Most 'safe' investments lose purchasing power. See if yours does.
Returns after reality
Your numbers
% p.a.
% p.a.
%
Your result
-1.04%
A 7% headline rate becomes 4.90% after 30% tax, and -1.04% after 6% inflation. You are losing purchasing power. The rupees grow, but they buy less every year.
- Headline (nominal) return
- 7.00%
- After tax
- 4.90%
- After tax + inflation (real)
- -1.04%
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See a fully tax-free alternative
PPF at 7.1% tax-free beats almost every FD for anyone in the 20% slab or above. Run the same amount through both calculators.
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The formula in plain English
Real return = ((1 + post-tax return) / (1 + inflation)) - 1. Not just "nominal minus inflation," because both rates compound. Over a long period, the simpler subtraction undershoots the actual erosion by 0.5-1 percent annually.
What clears the inflation hurdle in India
- Equity (Nifty 50 index funds): 11-12% long-run, ~10-11% after LTCG. Real return: 4-5%.
- PPF: 7.1% tax-free. Real return: 1.0-1.5%.
- Sukanya Samriddhi: 8.2% tax-free. Real return: 2.0-2.5%.
- Bank FD (30% slab): 7% headline, ~4.9% post-tax. Real return: -1.0%.
- Savings account (30% slab): 3% headline, ~2.1% post-tax. Real return: -3.7%.