How Lumpsum Compounding Builds Wealth
When you invest a single lumpsum amount into equity mutual funds, index funds, or equities, your money works with continuous compounding from day one without installment lags.
Long-Term Capital Gains (LTCG) Calculation
Under Indian tax regulations, mutual fund equity gains realized after 1 year are eligible for a ā¹1.25 Lakh tax-free limit per financial year. Net profits beyond this threshold are taxed at 12.5%.
Post-Tax Wealth = Total Corpus ā Max(0, (Gain ā ā¹1,25,000) Ć 12.5%)
Frequently Asked Questions
When should I choose Lumpsum over SIP? ā¼
Lumpsum investments yield optimal results during market downturns/corrections or when you receive a lump sum such as an annual bonus, property liquidation, or maturing deposit.
How does inflation impact my purchasing power? ā¼
Inflation erodes future buying power. With inflation adjustment turned on, the calculator converts your future corpus into today's equivalent rupee value.