Real Returns (Inflation-Adjusted) Calculator
Calculate true investment returns after adjusting for inflation and taxes to understand real wealth growth and purchasing power
Return before inflation adjustment
India average: 6%, US average: 2-3%
Long-term capital gains tax rate
Today's Value
₹100,000
What you can buy today
Equivalent in 10 Years
₹55,839
Due to 6% annual inflation, you'll need ₹100,000 to buy what costs ₹55,839 today
Nominal Value
₹310,585
Before inflation adjustment
Real Value
₹173,429
After inflation adjustment
After-Tax Real Value
₹155,718
After tax & inflation
Purchasing Power Lost
₹137,156
44.16% erosion
Inflation erodes 44.16% of your nominal returns over 10 years
Your real return after inflation is 5.66%, significantly lower than nominal 12%
After tax and inflation, your effective return is only 4.53%
To beat inflation, you need returns above 6% consistently
What is the difference between nominal and real returns?
Nominal returns are the actual percentage gains on your investment without adjusting for inflation. Real returns account for inflation and show your true purchasing power increase. For example, a 12% nominal return with 6% inflation gives you only 5.66% real return.
Why is inflation important for investment planning?
Inflation reduces the purchasing power of money over time. Even if your investment grows, if it doesn't grow faster than inflation, you're actually losing wealth in real terms. Understanding inflation-adjusted returns helps you set realistic investment goals.
How do taxes affect real returns?
Taxes on capital gains reduce your net returns. When combined with inflation, the impact is compounded. For instance, 12% nominal return becomes 10.8% after 10% tax, and then further reduces to ~4.3% after 6% inflation, significantly impacting long-term wealth.
What inflation rate should I use for India?
India's average inflation rate has been around 5-7% historically. The Reserve Bank of India targets 4% ±2%. For conservative planning, use 6-7%. For developed markets like the US or Europe, 2-3% is more appropriate.