Passive Income Calculator – Required Corpus for Cashflow

Investment Strategy

Monthly Investment (₹)

Expected ROI (% p.a)

Duration (Years)

Target Yield Rate (% p.a)

The annual return rate during the payout phase (SWP/Dividend).

Target Corpus

₹1.01 Cr

Growth Value

₹65 Lakhs

Passive Income Summary

Estimated Monthly Passive Payout

₹50,457

Corpus Goal

₹1.01 Cr

Total Principal Saved Compounded Returns

Principal: ₹36 Lakhs

Returns: ₹65 Lakhs

Freedom Strategy

✅ Goal: Live on interest only
📊 Sustainable 6% payout yield
⚖️ Inflation-protected wealth
📈 High-precision compounding

Annual Cash Flow Roadmap

See how your investments grow and the potential monthly payout at each milestone year.

Year	Investment	Total Corpus	Monthly Payout

How is Passive Income Calculated?

Payout = [Corpus × (Yield / 100)] / 12

Corpus: The total future value of your SIP and lumpsum investments.

Yield: The rate at which your corpus generates income (e.g., 6% for SWP).

Compounding: We use monthly compounding for the growth phase simulation.

Example Planning

If you save ₹25,000 monthly for 15 years at 12% ROI:

Total Corpus Built: ₹1.26 Crores
At 6% yield, your monthly payout: ₹63,000
Total Invested: ₹45 Lakhs | Wealth Gained: ₹81 Lakhs

Building Sustainable Passive Income in 2026

Passive income is money earned regularly with little to no daily active effort. Building dependable passive income streams provides financial peace of mind, freeing you from complete dependence on a monthly paycheck.

Popular passive income engines in India include dividend-paying stocks evaluated on our dividend yield calculator, commercial and residential real estate tracked on our rental yield calculator, and REIT distributions analyzed on our REIT tax yield calculator. If you have already accumulated mutual fund wealth, generate steady monthly cash flow using our SWP calculator and calculate your early retirement milestone on our FIRE calculator.

The Passive Income Calculator helps you transition from an "Earn-Spend" cycle to an "Invest-Harvest" cycle. By defining your target monthly payout, you can reverse-engineer the required corpus and the monthly SIP behavior needed to reach that milestone.

The 3 Best Passive Income Sources in India

To reach the numbers shown in our calculator, modern Indian investors typically use a combination of these three buckets:

Systematic Withdrawal Plans (SWP): Investing in Equity Mutual Funds and withdrawing a fixed amount monthly. This is the most tax-efficient method for high-growth portfolios.
Dividend Portfolios: Owning shares of high-quality, dividend-paying companies (PSUs, Utilities, Blue-chips). This provides a natural cash flow that grows with corporate profits.
Fixed Income (Bonds/FDs): Providing a stable, low-risk foundation. While yields are lower (around 6-8%), the stability is critical for your base expenses.

Passive Income vs. Active Income Comparison

Feature	Active Income	Passive Income
Time Dependency	Direct (No work = No pay)	Independent of Time
Scalability	Limited by hours worked	Unlimited (Compounding)
Primary Risk	Job Loss / Health	Market Volatility

Strategies to Reach FI (Financial Independence) Faster

The "Yield on Cost" Edge

If you buy a dividend stock today at a 3% yield, 10 years later your yield on your original purchase price could be 15% as the company increases payouts.

Exponential Payouts

Step-Up Your Savings

Don't keep a fixed SIP. Use our Step-up Tool to increase your monthly investment by 10% every year to reach your goal 5 years earlier.

Accelerated Freedom

Frequently Asked Questions (2026)

1. Can I live entirely on passive income?

Yes, once your passive income exceeds your monthly expenses, you have achieved Financial Independence. Most FIRE practitioners aim for a corpus of 25x-30x their annual expenses to ensure sustainability.

2. How is passive income taxed in India?

Dividends and Interest are added to your income and taxed at your slab rate. Rental income gets a flat 30% deduction before tax. SWP payouts from equity funds are highly tax-efficient, with only gains taxed at 12.5% (LTCG).

3. Is real estate good for passive income?

Real estate offers rental yield (2-3% for residential, 7-9% for commercial) plus capital appreciation. However, it requires active management and has high maintenance. REITs are a better "passive" way to invest in real estate.

4. What is a "Safe Withdrawal Rate"?

It is the percentage of your portfolio you can withdraw annually without ever running out of money. The classic rule is 4%, but in India, due to higher inflation, many advisors recommend 3% to 3.5% for 30+ years of retirement.

5. What is the difference between passive income and active income?

Active income requires continuous direct labor (salary, freelance hours). Passive income is generated from assets that compound and pay returns with minimal ongoing operational effort (dividends, real estate rent, royalties, mutual fund SWP).

6. How are stock dividends taxed as passive income in India?

Dividends are added to your total annual taxable income and taxed at your applicable personal income tax slab rate. Indian companies deduct 10% TDS under Section 194 if dividend payouts exceed ₹5,000 per year.

7. What is the most tax-efficient way to generate monthly passive income from investments?

A Systematic Withdrawal Plan (SWP) from an Equity Mutual Fund is significantly more tax-efficient than bank FD interest. In an SWP, only the capital gain portion of each withdrawal is taxed (at 12.5% LTCG after ₹1.25L exemption), rather than the entire withdrawal.

8. How much corpus do I need to generate ₹1 Lakh monthly passive income?

At a conservative 6% annual withdrawal yield, you need an investment corpus of approximately ₹2.0 Crores. At an 8% yield (hybrid/equity SWP), you need around ₹1.5 Crores.