SWP Calculator

Using the Upstox SWP calculator, you can see the withdrawals from your mutual funds on a monthly basis. It displays the total value of your mutual fund investment after withdrawals. Through the systematic withdrawal plan, you will be able to receive a regular income. The SWP calculator has a formula box where you can enter the total investment amount, withdrawal per month, annual rate of return, and tenure. You can use the SWP calculator to determine the future value of your mutual fund investments.

SWPs and SIPs work in opposite ways. SIPs allow investors to invest a set amount at predetermined intervals, whereas SWPs allow investors to withdraw a set amount at predetermined intervals. Depending on the investor’s needs, they can pick the amount, the frequency and the duration of the SWP.

When an investor needs a consistent cash flow from his/her investments, he/she might opt for an SWP. Every person’s need for a SWP is different. SWP can be used for a variety of purposes, including children’s education, EMI repayment, and retirement.

For equity-oriented scheme: If your holding period is less than 1 year, the gains will be calculated as short-term capital gains and will be taxed at 15% and if the holding period is more than 1 year, then long-term capital gains tax of 10% will be levied if the total capital gains exceed ₹1,00,000 in a year.

For debt-oriented scheme: If your holding period is less than 3 years, gains will be calculated as short-term capital gains and will be taxed as per the investors’ tax slab and if the holding period is more than 3 years, then long-term capital gains tax of 20% will be levied with the benefit of indexation.

Note: In view of the individual nature of the implications, each investor is advised to consult his or her own tax advisors/authorised dealers with respect to the specific amount of tax and other implications arising out of his or her participation in the schemes.

SWP is an ideal solution during retirement. Most people prefer conventional sources for investment to invest the lump-sum amount received during retirement. These traditional sources are taxable. SWP offers a tax-efficient way to earn a regular income. Therefore, retirees can earn a regular income and benefit from capital appreciation. SWP is not just for the retirees; it is also for people with multiple dependents. Employees with family responsibilities who require additional income can also opt for the SWP option. Children’s educational needs, travel needs, and financial goals approaching the deadline are a few reasons why individuals choose a SWP option.

The withdrawal options under the SWP Scheme are determined by the frequency of withdrawals. An investor can withdraw their funds on a monthly, quarterly, semi-annual, or annual basis. Withdrawals can be made from either the capital or the appreciated portion of the account. Withdrawals may have a negative impact on the investment’s value. In this case, the SWP calculator can assist in determining the final amount. Hence, it’s a good idea to think about your goals and needs before choosing a plan.

For retirees, it is a source of regular fixed income and for employees, it is a source of additional income. If carefully planned, an SWP can be a source of steady income to meet financial goals. An SWP allows a tax benefit on long-term capital gains up to ₹100,000, but gains above ₹100,000 are taxable.

The SWP is a better choice in volatile markets. Investors can keep their money in the mutual fund while making partial withdrawals. As a result, investors can expect a consistent return on their investments. Investors can use the SWP option to generate a secondary income in addition to their fixed income.

SWP is better than dividend plans. This is because dividends are taxable in the hands of investors according to their income-tax slab rate. Also, dividends above ₹5,000 are subject to TDS of 10%. In SWP plans, investors are liable to pay tax only for gains above ₹100,000.