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Real return calculator: what is left after inflation and tax.
A 12% return with 6% inflation is not 6% better off. The calculator works out the real return exactly, after an optional tax.
- Formula shown
- Free, nothing stored
- Share your result as a link
- Future rupees
- Today’s rupees
01How it works
In plain words.
Inflation divides, it does not subtract. The real return is one plus the return after tax, divided by one plus inflation, minus one. For small numbers that is close to return minus inflation, and it drifts further away as the numbers grow.
The formula
Return after tax = return x (1 - tax rate)Real return = (1 + return after tax) / (1 + inflation) - 102Worked example
The default numbers, by hand.
12% with 6% inflation and no tax: 1.12 / 1.06 - 1 = 5.66%, not 6%. With 30% tax on the return: 8.4% after tax and a real return of 2.26%.
| Input | Value |
|---|---|
| Return a year | 12% |
| Inflation a year | 6% |
| Tax on the return | 0% |
| Amount | ₹1,00,000 |
| Years | 10 years |
| Result | Value |
|---|---|
| Real return a year | 5.66% |
| Return after tax | 12.00% |
| Quick estimate (nominal minus inflation) | 6.00% |
| Value in 10 years, future rupees | ₹3.11 L |
| The same in today’s rupees | ₹1.73 L |
03Key concepts
What to know before you use it.
India’s inflation target
The RBI’s target is 4% CPI inflation within a band of 2% to 6%, renewed for 1 Apr 2026 to 31 Mar 2031. CPI (Combined) inflation ran between 3.4% (FY 2018-19) and 6.75% (FY 2022-23) in recent years.
Why it matters
Goals are paid in future rupees but felt in today’s. The real return is the rate at which purchasing power actually grows.
Good to know
- A deposit rate below inflation has a negative real return before tax.
- Use a higher inflation figure for costs that tend to rise faster, such as education or medical care.
04Assumptions
What the calculator assumes.
- Constant return, inflation and tax rate; tax charged on each year’s return, a simplification.
Sources, checked 12 Oct 2026
05Questions
Asked about the Real return after inflation.
How do you calculate real return?
Real return = (1 + nominal return) / (1 + inflation) - 1. At 12% and 6%: 5.66%.
Why not just subtract inflation?
Subtracting is an approximation that overstates the real return, more so at higher rates.
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06Keep going
Learn the idea, see it applied.
More goal planning calculators
Education only, not investment advice. RupeeCase is a technology platform operated by QC Alpha Technologies Pvt Ltd; it is not a fund, a PMS or a SEBI registered investment adviser. Model returns are back tested and not a promise of future returns. Figures carry the date they were checked.