Simulation Parameters
Indian Tax Rules
Initial Capital (Lump Sum)
₹1,00,000
Monthly SIP Investment
₹5,000
Time Horizon
5 Years
Annual Inflation Rate
6.0%
Income Tax Bracket (Slab)
PORTFOLIO ASSET MIX
Total: 100%
Bank FDs (6.8%)
%
Debt Funds (7.5%)
%
Index Funds (12%)
%
Direct Stocks (14%)
%
Wealth Projection & Net Returns
Post-Tax Compounding
Maturity Value
₹5,24,180
Invested: ₹4,00,000
Net Gain (Wealth Added)
₹1,24,180
+31.05% Total Return
Effective Net CAGR
10.45%
Post-Tax Annualized
Real Purchasing Power
₹3,91,850
Discounted @ 6.0% Inflation
| Year | Total Invested | FD Only Benchmark | Diversified Portfolio | Real Purchasing Power |
|---|
1. 3–6 Months Emergency Fund
Park strictly in Liquid Funds or High-Safety Bank FDs before starting stock SIPs.
2. Pure Term Insurance (₹1–2 Cr)
Secure financial dependents with low annual premiums rather than investment-linked ULIPs.
3. Comprehensive Health Cover
Base ₹10–25 Lakh policy outside corporate employer cover to shield investments from hospital bills.
4. Match Horizon to Instrument
< 3 years: FDs/Debt only. > 5 years: Nifty 50 Index funds to beat taxation and inflation.
Source Insights: Based on discussions on beginner asset allocation in India. FDs offer capital certainty for emergency reserves, while broad index funds (Nifty 50) protect against rupee inflation over 5+ year horizons. Taxes applied: Section 194A TDS / income slab rates for FDs and debt; Section 112A equity LTCG rates.