How we calculate

The formulas and assumptions behind every Selvayana calculator and the life plan, with the official sources we follow.

All results are estimates from the figures you enter and the assumptions shown. They are not predictions or advice. Rates and rules were last reviewed in October 2026.

Growth and SIPs

Annual returns are turned into an equivalent monthly rate, (1 + annual return)1/12 − 1, so twelve months of growth equal one year at the rate you enter. SIP instalments are invested at the start of each month. A yearly step-up raises the instalment at the start of each new year. Some sites divide the annual rate by 12 and invest at the month’s end; that gives slightly lower required SIPs over long periods.

Today’s money

Future amounts are converted to today’s money by dividing by (1 + inflation)years. The default inflation is 6% a year; you can change it everywhere.

Retirement corpus

Expenses are grown with inflation to your retirement age. The corpus is the amount that, earning your post-retirement return, pays those expenses at the start of every year until your planning age while they keep rising with inflation. This is the present value of a growing annuity, worked out at the real rate (1 + return) ÷ (1 + inflation) − 1.

Goals in the life plan

Each goal’s cost is grown with inflation to its year. Savings you allocate to a goal grow at the rate of the mix you choose, moving gradually towards safer assets as the goal nears, and the monthly SIP covers any gap. Goal savings that aren’t needed by retirement are counted towards retirement.

Loans

EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1), with r the monthly rate and n the number of months. Prepayments reduce the outstanding balance and shorten the tenure.

Deposits and government schemes

FDs compound at the frequency you pick (most banks use quarterly). RDs compound quarterly on each instalment. PPF interest is on the lowest balance between the 5th and the end of each month, credited yearly. Sukanya Samriddhi, NSC, SCSS and Post Office MIS use their scheme rules and the rates in force at review; the government revises these rates every quarter.

EPF and NPS

EPF uses 12% employee and 12% employer contributions, with 8.33% of pay up to the wage ceiling going to EPS, and interest on each month’s opening balance, credited yearly. NPS exits follow PFRDA’s December 2025 rules for the lumpsum and annuity split.

Tax

Income tax, capital gains, HRA and gratuity follow the Income Tax Act as we understand it at review, including the new and old regime slabs, standard deductions, rebate and 4% cess. Tax rules change with each Budget, so always confirm before you file.

How the calculators are checked

Before launch, every calculator was compared with an independent recalculation across 1,411 scenarios, and the life plan across 144 households with different incomes, savings rates, ages and family types. Differences were fixed and the checks re-run.

Official sources

Spotted an error or an out-of-date rule? Please let us know.

For awareness only. Not investment advice or a recommendation to buy, sell or hold any security or product. All figures are estimates based on the inputs and assumptions shown; actual results will differ and may be much lower. No return is guaranteed. Investments in securities market are subject to market risks. Read all related documents carefully before investing. Consult a SEBI Registered Investment Adviser before acting. Printed from Selvayana on .