Finance & Investment · Returns
Real Return Calculator (Inflation-adjusted)
Convert a nominal return — an FD rate, a fund's CAGR — into its real return after inflation (the exact Fisher formula, not just subtraction), optionally after tax, and see what your money will actually buy in the future.
Your inputs
Quick start — try a typical case
e.g. your FD rate or a fund's annual return.
Your tax rate on this income: slab rate for FD interest, 0 if tax-free.
Your result Live
Real Return After Tax
-0.71%
7.50% earned − 30% tax − 6.00% inflation, compounded correctly
- Real Return Before Tax
- 1.42%
- Return After Tax
- 5.25%
- Quick Estimate (nominal − inflation)
- 1.50%
- Your ₹10,00,000 Grows To (after tax)
- ₹16,68,096
- Worth in Today's Money
- ₹9,31,456 (−₹68,544 of buying power)
- Real value · 56%₹9,31,456
- Eaten by inflation · 44%₹7,36,640
After tax and inflation this investment loses buying power, even though its balance grows.
How this is calculated
Real return = (1 + nominal × (1 − tax)) ÷ (1 + inflation) − 1
- nominal
- Stated annual return
- tax
- Tax rate on the return (applied each year)
- inflation
- Annual inflation rate
A 7.5 % FD in a year of 6 % inflation doesn't make you 1.5 % richer — and after 30 % tax it makes you poorer. The exact (Fisher) real return divides growth factors rather than subtracting rates, which matters when rates are high. Real return is what decides whether your savings actually buy more in future.
Assumptions & sources
- Return, tax and inflation are constant each year.
- Tax is paid yearly on the return (as with FD interest); for gains taxed only on sale the drag is smaller.
- 1The Theory of Interest (Fisher, 1930) — Macmillan
- 2Investments (Bodie, Kane & Marcus), chapters on returns, compounding and the time value of money — McGraw-Hill
- 3Consumer Price Index — Ministry of Statistics and Programme Implementation (MoSPI)
Calculator ID FIN-RET-REAL-001 · version 1.0.0
Common questions
Why not just subtract inflation?
Subtraction is a good approximation for small rates. The exact formula (1 + r) ÷ (1 + i) − 1 is slightly lower and becomes noticeably different when returns or inflation are high.
Can the real return be negative?
Yes — whenever the after-tax return is below inflation. Your balance still grows, but it buys less each year.