Calculator Assumptions
v1.0 — January 2026Our calculators use default values based on official sources. These assumptions are versioned — when data changes, we update them and document why.
| Parameter | Default Value | Source & Rationale |
|---|---|---|
| Equity Returns | 12% p.a. | Nifty 50 CAGR (~12.7% over 20 years). Conservative round-down. [NSE] |
| Debt Returns | 7% p.a. | Blended estimate: PPF (7.1%), FD (~6.5-7%), corporate bonds (~7.5%) |
| Inflation Rate | 6% p.a. | RBI's medium-term target band (4% ± 2%). Upper bound used for conservatism. [RBI] |
| PPF Interest | 7.1% p.a. | Ministry of Finance notification (Q4 FY25). [DEA] |
| LTCG Tax (Equity) | 12.5% | Above ₹1.25 lakh exemption. Union Budget 2024-25. [IT Dept] |
| STCG Tax (Equity) | 20% | For holdings <12 months. Union Budget 2024-25. |
| EPF Interest | 8.25% p.a. | EPFO declared rate for FY 2023-24. |
🧠 Why We Version Assumptions
Financial models are not truths — they're tools. When tax laws change (every Budget) or market conditions shift (every cycle), the "right" defaults change too. By versioning our assumptions, we teach a critical lesson: models evolve, and so should your understanding of them.
v1.0 — January 2026 (Initial Release)
- Equity Returns: Set to 12% based on Nifty 50 20-year CAGR (~12.7%)
- Inflation: Set to 6% (RBI upper target band) for conservative projections
- LTCG Tax: Updated to 12.5% above ₹1.25L (Union Budget 2024-25)
- STCG Tax: Updated to 20% (Union Budget 2024-25)
- PPF Rate: 7.1% as per Q4 FY25 notification
- EPF Rate: 8.25% as per EPFO FY23-24 declaration
Future Updates
When official rates change or new budget announcements are made, we'll update this page with a new version entry documenting exactly what changed and why.
💡 How to Use This Information
- Our defaults are starting points, not gospel. Adjust them based on your situation.
- For conservative planning, use lower equity returns (8-10%) and higher inflation (7%).
- For aggressive scenarios, you might use higher returns — but understand the risk.
- Always re-run scenarios when major policy changes occur (Budget, RBI announcements).