A ₹10,000 monthly SIP for 20 years looks spectacular on a calculator. At a 12% annual return, you invest ₹24 lakh and end with about ₹99 lakh, close to ₹1 crore. But a crore in 2046 is not a crore today. After adjusting for inflation, that corpus buys roughly what ₹37 lakh buys now. Here is how the number is built, which assumptions drive it, and what the data says you can do about it.
The assumptions, and where they come from –
Every projection rests on two inputs: return and inflation.
Return. The Nifty 50 Total Return Index, which includes reinvested dividends, delivered about 12.44% a year over 20 years, according to NSE’s Nifty 50 whitepaper. The price-only figure is about 11.09% [1]. I use 12% as the base case and 10% as a conservative one. These are scenarios, not forecasts.
Inflation. The RBI’s target is 4% with a tolerance band of 2% to 6%, and the government has retained it for April 2026 to March 2031 . Actual inflation has usually sat above the target: it averaged 4.9% during the inflation-targeting era, against 6.8% before it, per RBI data. Retail inflation reached 4.82% in August 2026 , and on 7 October the RBI raised the repo rate to 5.50% while lifting its FY27 inflation forecast to 5.2% . I use 5% as the base case, with 4% and 6% on either side.
The maths
Contributions are assumed to compound monthly. The real value is the corpus divided by (1 + inflation) raised to the power of 20. At 5% inflation, prices rise about 2.65 times in 20 years, so a future rupee is worth about 38 paise in today’s money.
| Annual return | Corpus (nominal) | Real value at 4% inflation | Real value at 5% inflation | Real value at 6% inflation |
|---|---|---|---|---|
| 10% | ₹75.9 lakh | ₹34.7 lakh | ₹28.6 lakh | ₹23.7 lakh |
| 12% | ₹98.9 lakh | ₹45.1 lakh | ₹37.3 lakh | ₹30.8 lakh |
Total invested: ₹24 lakh. Source: author’s calculations.
At a 12% return, the corpus is ₹98.9 lakh on paper but ₹37.3 lakh in today’s money. Even your last instalment is affected: the ₹10,000 you invest in month 240 has the buying power of about ₹3,770 today. A flat SIP shrinks in real terms every year.
The contributions shrink too. Your 240 instalments, valued in today’s rupees at 5% inflation, total about ₹15.4 lakh, not ₹24 lakh. Set against the ₹37.3 lakh real corpus, your real gain is about ₹21.9 lakh.
A simpler way to see it: real returns
Strip inflation out and a 12% nominal return becomes a real return of about 6.7%, calculated as (1.12 ÷ 1.05) − 1. At 10% nominal it is about 4.8%. The real return is the rate at which your purchasing power actually grows, and it is the number to compare with goals priced in today’s rupees, such as school fees, a home down payment or retirement spending.
Near-term pressure is real. SBI Research expects retail inflation to exceed 6.5% in October and November [2]. A single quarter matters less than a 20-year average, but it is a reminder that the inflation assumption is not fixed.
Tax takes a further bite
Long-term equity gains above ₹1.25 lakh a year are taxed at 12.5% [3]. If you redeemed the entire ₹98.9 lakh in one financial year, the gain would be about ₹74.9 lakh and the tax about ₹9.2 lakh. That leaves ₹89.7 lakh, or roughly ₹33.8 lakh in today’s money. Staggering withdrawals across years can use the annual exemption more than once, but check the current rules before planning around them. These figures also ignore expense ratios and exit loads.
Returns are never as smooth as the average
Twenty-year averages hide long, uncomfortable stretches. Independent research by freefincal found that a 10-year SIP in the Nifty 50 TRI started in April 2010 had returned just 3.4% a year by April 2020, and a 15-year SIP begun in April 2005 had returned 6.6% [4]. Both were measured near the COVID-crash low, but they show why a SIP’s outcome depends on when you finish, not only when you start. The 12% scenario is one result in a wide range.
What moves the needle: contribution size
The lever you control is how much you invest over time. These are illustrations at a 12% return and 5% inflation, from my calculations:
| Strategy | Total invested | Corpus (nominal) | Corpus in today’s money |
|---|---|---|---|
| Flat ₹10,000 SIP | ₹24.0 lakh | ₹98.9 lakh | ₹37.3 lakh |
| ₹10,000 SIP, raised 5% a year | ₹39.7 lakh | ₹1.37 crore | ₹51.8 lakh |
| ₹10,000 SIP, raised 10% a year | ₹68.7 lakh | ₹1.99 crore | ₹75.0 lakh |
A 5% annual step-up roughly keeps your contribution constant in real terms. Put differently, to finish with ₹1 crore in today’s purchasing power after 20 years, a flat SIP would have to start at about ₹26,800 a month, not ₹10,000.
The takeaway
Nominal numbers flatter. A ₹1 crore target set today should be translated into 2046 rupees: at 5% inflation you would need about ₹2.65 crore to match it. Plan in real terms, review your SIP amount every year, and treat any return assumption as a range. The arithmetic is not an argument against SIPs. It is an argument against reading the headline number without adjusting for inflation.
This article is for education only and is not investment advice. Projections are illustrative, use assumed returns, and actual results will vary. Tax rules change, so please consult a SEBI-registered investment adviser before making decisions.