Each month, the simulation accrues interest on the current balance, then subtracts the fixed withdrawal: Balance(next) = Balance(current) × (1 + r/12) − withdrawal, where r is the annual rate as a decimal. Applied to your inputs:

At ₹1,43,000 per month against ₹9,00,000 and an assumed 1% return, this simulation runs out after about 7 months — roughly 0 years and 7 months — having paid out a total of ₹10,01,000. The annualised withdrawal rate works out to about 190.67% of the starting corpus, more than the assumed return could sustain over the long run.

A commonly cited (US-originated, not India-specific) reference point is the "4% rule" — withdrawing about 4% of a corpus annually, adjusted for inflation, has historically had a high probability of lasting 30 years in backtested US market data. Apply a slightly more liberal 7% reference to your ₹9,00,000 corpus instead and it points to a monthly withdrawal near ₹5,250 — compare that against your actual ₹1,43,000 to get a rough sense of whether you're drawing conservatively or aggressively. It's a loose anchor, not a rule that transfers cleanly to Indian mutual funds, which carry different return, volatility, and tax characteristics than the US equity data the original research was built on.

The reason SWP tends to beat FD interest or an annuity on tax efficiency is that only the gains portion of each withdrawal is taxed, not the whole amount. Every instalment is a partial redemption of units, split between return of principal (untaxed) and capital gain (taxed per the fund's category and holding period). This calculator doesn't track unit-level cost basis, so the figures below are a rough illustration rather than a filing-ready number.

• Equity-oriented funds: gains on units held over 12 months are LTCG, taxed at 12.5% above a ₹1,25,000 yearly exemption under rules effective from July 2024. On the simulated interest component of about ₹2,757 here, taxable LTCG after the exemption would be roughly ₹0, working out to an estimated tax of about ₹0 — illustrative only, since gains are actually realised withdrawal by withdrawal, not as one lump sum.
• Debt-oriented funds (bought on or after 1 April 2023): the gains portion of each withdrawal is taxed at your income-tax slab rate, per the Finance Act, 2023 change.
• No TDS on mutual fund SWP: unlike bank FD interest, mutual funds generally don't deduct TDS on redemption proceeds for resident individual investors — you still have to report and pay tax on the gains portion yourself.
• Advance tax can apply: if your total tax liability for the year, including SWP gains, crosses the advance tax threshold, you may owe it in quarterly instalments rather than at year-end filing, to avoid interest under Sections 234B/234C.

1. Start with the corpus available to begin withdrawals from: ₹9,00,000.
2. Pick a monthly withdrawal: ₹1,43,000, which works out to about 190.67% of the corpus on an annualised basis.
3. Assume a long-term annual return for the invested balance: 1%.
4. Each month, interest accrues on the current balance first, then the withdrawal comes out — so the net monthly change starts small and shifts as the balance itself grows or shrinks.
5. Run that month by month and the balance reaches zero after about 7 months (0 years, 7 months), having paid out a total of ₹10,01,000.
6. Of that total, about ₹2,757 came from investment growth and the rest from the original principal being drawn down.
7. Net of an illustrative tax estimate of about ₹0 on the gains portion (assuming an equity-oriented fund held over 12 months), the effective cash in hand runs a little below the gross withdrawal figures used throughout this page.

A flat ₹1,43,000 monthly withdrawal buys a little less every year as prices rise. Step it up by 5% every 12 months instead — a simple way to keep pace with typical inflation — and the same ₹9,00,000 corpus at 1% instead lasts about 0 years and 7 months, with the withdrawal climbing to roughly ₹1,43,000 per month by the end of the run, and total withdrawals of about ₹10,01,000.

This comparison is the trade-off in miniature: a higher withdrawal path protects purchasing power but generally shortens how long a given corpus can keep paying out. Which side of it makes sense for you depends on how much room you have to cut spending if the corpus runs low, and how much other guaranteed income — pension, SCSS, annuity — sits underneath it as a backstop.

Different monthly withdrawals (same corpus and rate)

Different return assumptions (same corpus and withdrawal)

Different starting corpus (same withdrawal and rate)

The withdrawal table moves fastest, because a change there hits the balance directly every single month. The rate table moves slower but compounds — a return that's off by a percentage point barely shows in year one and dominates by year twenty. Corpus size scales the outcome roughly in proportion, since the withdrawal rate percentage stays fixed across those rows unless you change it too.

• Assuming a flat, guaranteed annual return. 1% here is an input, not a promise — a bad sequence of early negative returns can deplete a corpus faster than a smooth average return would suggest, even if the long-run average matches your assumption.
• Ignoring inflation. A fixed ₹1,43,000 monthly withdrawal buys less over time as prices rise. Stepping withdrawals up annually keeps pace, at the cost of shortening how long the corpus lasts, as the comparison above shows.
• Skipping expense ratios and exit loads. This simulation is pre-cost; actual fund expense ratios (roughly 0.5-2% a year, depending on the fund and plan type) quietly lower the effective return you should be assuming.
• Withdrawing more than the fund can sustain. An annualised withdrawal rate meaningfully above the assumed return — visible in the sensitivity tables above — draws down principal, not just gains, which compounds the depletion problem in later years.
• Forgetting the tax filing itself. Only the gains portion is taxed, but you're still responsible for reporting and paying it each year — it doesn't arrive pre-taxed the way FD interest does with TDS already withheld.

SWP is one of several ways to turn a corpus into regular income. Here's how it stacks up against two other options Indian retirees commonly use:

Most retirees end up blending these rather than picking one — SCSS or an annuity for a guaranteed income floor, SWP from a mutual fund portfolio for growth potential and tax efficiency on the rest. This calculator only models the SWP leg of that mix.

SCSS has its own investment ceiling and is open only to senior citizens (and certain retirees under specific conditions) through banks and post offices, with interest paid quarterly and revised periodically by the government — check the current SCSS rate and limit before relying on it in your own plan, since both change roughly every quarter.

The rate you type into this calculator implicitly assumes a fund category. As a general starting framework:

• Equity or aggressive hybrid funds suit a long horizon and tolerance for volatility — sequence-of-returns risk is a real concern here if the market falls sharply in the early years of withdrawals.
• Conservative hybrid or balanced advantage funds are a common middle ground: lower expected volatility than pure equity, some growth left in, and — if the equity allocation stays above 65% — equity-like taxation on the gains.
• Debt funds suit investors who'd rather have stability than growth, at the cost of slab-rate taxation (for units bought on or after 1 April 2023) and typically lower long-run returns.
• A bucket strategy — a near-term low-volatility bucket funding the next few years of withdrawals, and a longer-term growth bucket for later years — is a common way to blunt sequence-of-returns risk without giving up on growth entirely.

Retirement proceeds (provident fund, gratuity, NPS lumpsum), the sale of a property or business, a maturing insurance policy, or a VRS/severance payout are the usual sources — money someone wants converted from a large one-time sum into a steady monthly income rather than spent down unevenly or left idle. It suits retirees replacing a salary, and anyone who wants tax-efficient regular income since only the gains portion of each withdrawal is taxed.

It suits you less if you have no other guaranteed income underneath it — a pension, SCSS, or annuity floor — since relying entirely on a market-linked SWP is riskier if markets underperform early on. It also doesn't fit anyone unsettled by balance volatility, or anyone whose required withdrawal rate is high enough relative to the corpus that the sensitivity tables above already show it depleting fast.

₹1,43,000 a month against a ₹9,00,000 corpus, at an assumed 1% return, is an annualised withdrawal rate of about 190.67%. That runs out in about 0 years and 7 months here — worth revisiting if the corpus needs to last longer, whether by trimming the withdrawal, shifting to a higher-return (and higher-risk) allocation, or adding a second income source. Before committing to a real withdrawal plan, run your own numbers through the sensitivity tables above at a rate lower than you expect, not higher.

Figures on this page are computed live from the corpus, monthly withdrawal, and assumed annual rate you entered, using a month-by-month simulation that accrues interest first, then subtracts the withdrawal, capped at 600 months (50 years). Sensitivity tables recompute the same simulation at nearby withdrawal, rate, and corpus values. Tax estimates use illustrative rates and exemption thresholds current as of rules effective from July 2024 and do not account for fund-specific expense ratios, exit loads, or your actual unit-level cost basis. Nothing here is investment, tax, or retirement planning advice — consult a professional for a plan tailored to your situation.