How to Make ₹1 Crore for Retirement in India

Planning for retirement serves as a cornerstone in securing financial stability for life beyond the professional years. Essentially, it involves delineating financial objectives and lifestyle aspirations for the post-work phase, coupled with a strategic plan to realize these aims. Among the multitude of avenues available for retirement savings, Systematic Investment Plan (SIP) in mutual funds and the Public Provident Fund (PPF) emerge as robust choices, recognized for their efficacy in long-term wealth creation in India. Here is a comprehensive guide detailing the pathway to crafting a retirement fund amounting to ₹1 crore.

How to Make ₹1 Crore for Retirement in India

SIP in Mutual Funds

Investing in mutual funds through a Systematic Investment Plan (SIP) is a prudent approach, allowing individuals to invest a specific amount at regular intervals instead of a lump sum.

SIPs offer a practical investment avenue, eliminating the need to time the market. They leverage rupee-cost averaging, spreading investments over time. Notably flexible, SIPs accommodate small initial investments, allowing gradual increments as financial capacities grow.

Consider Rahul, a 25-year-old executive in an MNC aiming to accumulate a ₹1 crore retirement corpus by age 40. With an expected SIP mutual fund return of 12% He can achieve this goal. Through calculated planning, the estimated monthly SIP investment required for Rahul stands at ₹10,009.

If Rakesh aims to retire at 50, investing ₹5,270 monthly with a 12% p.a. return over 25 years can build his retirement corpus. In another scenario, if Rakesh plans to invest ₹25,000 monthly for 15 years, targeting retirement at 40 with a 12% p.a. return, he can expect a total investment value of ₹1,26,14,400 at the end of the investment period.

The table below showcases how much you need to invest each month to accumulate a retirement corpus in various scenarios.

Corpus Target


Investment Period

Monthly SIP

Corpus Generated

₹1 Crore


10 years



₹1 Crore


15 years



₹1 Crore


20 years



₹1 Crore


25 years



Taxation on SIPs in India

Here's an overview of the taxation on gains from SIPs in mutual funds:

Nature of Profits / Income

Equity Funds Taxation

Non-Equity Funds Taxation

Minimum holding period for long term capital gains

1 year

3 years

Minimum holding period for short term capital gains

Less than 1 year

Less than 3 years

Short term capital gains

15% + 4% cess = 15.60%

As per the tax rate of the investor (30% + 4% cess = 31.20% for investors in the highest tax slab)

Long term capital gains

10% + 4% cess = 10.40% (if the long term gain exceeds ₹1 lakh)

20% with indexation

Dividend distribution tax

10% + 12% surcharge + 4% cess = 11.648%

25%+ 12% surcharge +4% cess = 29.120%

However, SIPs in Equity Linked Savings Schemes (ELSS) are eligible for tax benefits under Section 80C of the Income Tax Act. You can claim tax deductions of up to ₹1.5 lakh on the invested amount, allowing you to factor in tax implications while planning your investment to achieve a retirement corpus of ₹1 crore.

How to Make ₹1 Crore for Retirement in India

Public Provident Fund

The Public Provident Fund (PPF) is a well-known savings and investment scheme offered by the Indian government, established in 1968 to promote savings and offer a secure, tax-efficient investment avenue for Indian residents. PPF accounts can be opened at authorized bank branches and post offices nationwide.

For a PPF account, the minimum annual deposit stands at ₹500, while the maximum permissible deposit is ₹1.5 lakh. Any investment surpassing this limit won't accrue interest or qualify for tax deductions.

You have the flexibility to make deposits in a lump sum or in installments, but the total annual deposit cannot exceed the prescribed maximum. PPF accounts have a maturity period of 15 years, and after maturity, they can be extended in increments of 5 years.

Returns and Tax Benefits on PPF in India

The PPF interest rate, which stands at 7.1%, is subject to revision by the government quarterly.

Contributions made to a PPF account qualify for deductions under Section 80C of the Income Tax Act, making it a tax-efficient investment avenue. Not only are the interest earnings from a PPF account tax-free, but the withdrawals and maturity amount also enjoy tax-exempt status.

Consider an example to illustrate the retirement corpus calculation:

Rajan, a 30-year-old IT engineer planning to retire at 55, granting him 25 years until retirement. If he opts to invest ₹1.5 lakh annually, leveraging the current interest rate, he could potentially accumulate a corpus of ₹1.03 crore over this 25-year period through his PPF contributions.

The Bottom Line

In conclusion, understanding the diverse avenues for long-term savings, such as SIPs in mutual funds and investments in PPF, is pivotal in securing a stable and fulfilling retirement. The tax benefits, flexibility, and potential returns offered by these instruments play a vital role in achieving the envisioned retirement corpus in India. Whether through disciplined SIPs or the tax-efficient PPF, individuals like Rohit can strategically plan their financial future, ensuring a comfortable retirement while benefiting from tax advantages. Tailoring investments to individual financial goals and leveraging these reliable instruments can pave the way for a financially secure and rewarding post-retirement life.