# Inflation Adjusted Return Calculator: Real Return

> Inflation adjusted return calculator: find your real return after inflation and tax, and what your investment will be worth in today's rupees.

Source: https://trykosh.com/tools/real-return-calculator

Free tool - Investing

# Inflation-adjusted return calculator

See what your investment really earns once inflation, and tax if it's charged yearly, are taken out.

Rules checked 25 October 2026Free - no sign-upRuns in your browser

Real return (after inflation and tax)

\-1.12%

7% nominal, 4.82% after tax, 6% inflation

Real return before tax**0.94%**

Value in 10 years**INR 1,60,057**

In today's rupees**INR 89,375**

Nominal return

7%

− Tax at 30% + cess

2.18%

Return after tax

4.82%

Inflation

6%

Real return = (1 + after-tax) / (1 + inflation) − 1

\-1.12%

Your money grows in rupees but buys less each year: the return doesn't keep up with prices after tax.

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## How the real return calculator works

Your real return is the growth in what your money can buy, not in rupees. If an investment earns 7% and prices rise 6%, your purchasing power grows by only about 1%.

The exact real return divides rather than subtracts: (1 + return) / (1 + inflation) − 1. At low rates the two are close; at higher ones the difference matters.

If the return is taxed every year, as FD, RD and bond interest are, the calculator first takes out tax at your slab plus 4% cess, then adjusts for inflation. For equity funds, where tax is paid only on sale, turn the yearly tax off and adjust the final value separately.

It then grows your amount at the after-tax return and shows the final value in rupees and in today's rupees, which is what it's really worth.

Real return = (1 + r x (1 − t)) / (1 + inflation) − 1

r

nominal return

t

tax rate including cess, if taxed yearly

## Worked example: Is a 7.25% FD beating inflation?

Manoj, in the 20% slab, has INR 3 lakh in a 5-year FD at 7.25%. After tax plus cess the FD earns 5.74%, and with 5% inflation his real return is just 0.71% a year. The FD will show INR 3,96,606 at maturity, but that's worth about INR 3,10,751 in today's rupees.

Real return (after inflation and tax)

0.71%

7.25% nominal, 5.74% after tax, 5% inflation

Real return before tax**2.14%**

Value in 5 years**INR 3,96,606**

In today's rupees**INR 3,10,751**

Nominal return

7.25%

− Tax at 20% + cess

1.51%

Return after tax

5.74%

Inflation

5%

Real return = (1 + after-tax) / (1 + inflation) − 1

0.71%

Subtracting inflation from the return is a quick estimate; the exact real return divides instead, as shown.

[Load this example into the calculator ->](?rate=7.25&inflation=5&slab=20&amount=300000&years=5#calculator)

## Good to know

-   In the 30% slab, an FD needs to pay about 8.7% just to match 6% inflation after tax.
-   Tax-free returns, such as PPF and EPF interest within limits, don't lose anything to yearly tax, so their real return is simply the rate against inflation.
-   For long-term goals, compare investments on real, after-tax returns, not headline rates.

## Frequently asked questions

What is real rate of return?

It's your return after adjusting for inflation, so it shows how much your purchasing power grows. The exact formula is (1 + nominal return) / (1 + inflation) − 1.

Can real return be negative?

Yes. If inflation is higher than your after-tax return, your money buys less every year even though the balance rises. FDs in high tax slabs often have negative real returns when inflation runs high.

Why not just subtract inflation from the return?

Subtracting is a quick approximation. Dividing is exact. At 12% return and 6% inflation, subtracting gives 6% while the exact real return is 5.66%.

Which inflation rate should I use?

Consumer price inflation (CPI) for general planning, around 5% to 6% in recent years. For goals like education or healthcare, a higher personal inflation rate of 8% to 10% is often used.

## Sources and assumptions

-   [Reserve Bank of India](https://www.rbi.org.in/)
-   [Income Tax Department](https://www.incometax.gov.in/)

Rules and rates last checked on 25 October 2026. Results are estimates for planning and education, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting.