Inflation Returns Calculator — Calculations & Slabs for FY 2026-27

Inflation-adjusted returns, also known as real returns, are the profits you make on an investment after accounting for the rate of inflation. They represent the actual increase in your buying power rather than just the nominal increase in currency value.

Inflation erodes the purchasing power of your money over time, meaning the same amount of money will buy fewer goods and services in the future. If your investment return is lower than the rate of inflation, your money is effectively losing value, even though the nominal balance may be rising.

Fixed income investments like Fixed Deposits (FDs) usually offer modest interest rates. If a bank FD offers 7% interest and inflation is at 6%, your real rate of return is only about 0.94% after inflation. Taxation on the nominal interest further reduces this real return, often making it negative.

Over the past two decades, India's annual retail inflation rate (CPI) has generally fluctuated between 4% and 7%, averaging around 5.5% to 6%. Financial planning in India typically assumes a baseline inflation rate of 6% for long-term projections. This ensures full compliance with the latest regulations, allowing you to estimate values correctly and avoid common filing errors.

You can verify the values against the official notifications listed in our data sources section at the bottom of the page.