SIP Guide India 2025-26 | What is SIP, How It Works, Returns & Goals
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📈 Complete SIP Guide — India FY 2025-26

What is SIP · How it works · Returns at 12–15% · vs FD/PPF/RD · Goal amounts

₹10K/mo

→ ₹1.04 Cr in 20yr at 13%

₹21K/mo

to reach ₹1 Cr in 15yr (12%)

12–15%

Nifty 50 SIP XIRR historically

₹500

Min SIP amount to start

SIP (Systematic Investment Plan): A SIP is a disciplined investment method where a fixed amount is automatically invested in a mutual fund scheme at regular intervals (typically monthly). Unlike lump-sum investing, SIP uses rupee cost averaging — buying more units when prices are low and fewer when high — resulting in a lower average cost over time. ₹10,000/month in a Nifty 50 index fund at 13% CAGR for 20 years grows to ₹1.04 crore from ₹24 lakh invested.

How SIP Works — The 3 Core Concepts

📉 Rupee Cost Averaging

Fixed ₹5,000/month → buys 50 units at ₹100, 62 units at ₹80, 41 units at ₹120. Average cost = ₹96.8 vs NAV ₹100 — you automatically buy more when the market is cheap.

📈 Compounding Power

Returns earned generate their own returns. ₹10K/month at 12%: Year 10 corpus = ₹22.4L (₹12L invested). Year 20 corpus = ₹98.9L (₹24L invested). The second decade alone generates ₹76.5L — 3× the first decade.

⏰ Time in Market

Starting 5 years earlier makes a dramatic difference. ₹10K/mo for 20yr at 12% = ₹98.9L. Same SIP for 25yr = ₹1.87 Cr. 5 extra years adds ₹88L — more than the previous 20yr corpus!

⚡ SIP Quick Calculator

12% 15 years

Maturity Value

₹44.4L

₹18.0L

Invested

₹26.4L

Gains

147%

Return %

Full SIP Calculator with Year-wise Chart →

SIP — Key Rules to Remember

LTCG on equity MF: 12.5% on gains above ₹1.25L/year (Budget 2024). Below ₹1.25L annual gain: zero tax.
ELSS SIP: 80C deduction up to ₹1.5L/year + 3-year lock-in per SIP instalment.
STCG (held <1yr): 20% flat tax on equity MF gains (Budget 2024, raised from 15%).
Pause SIP: most AMCs allow 1–3 month pause without cancellation via the app or registrar portal.