How much corpus do you need for your target monthly passive income? See the gap, timeline to goal and most tax-efficient income source.
Passive income is often misunderstood. ₹50,000/month passive income requires ₹75L–₹1.5Cr corpus depending on the income source. The SWP (Systematic Withdrawal Plan) from equity mutual funds is the most tax-efficient and inflation-adjusted passive income method for most investors.
SWP from equity mutual funds (held 1yr+) pays LTCG at 12.5% only on gains, not the full withdrawal. Compare: FD interest is taxed at your slab rate (up to 30%). Dividend income is taxed at slab rate. SWP is the tax winner for most investors in 20%+ slabs.
3.5–4% per year is commonly used (the "4% Rule" from US research). For India's higher inflation and market dynamics, 3.5% is safer. On a ₹1Cr corpus: withdraw ₹3,50,000/yr or ₹29,167/month. SWP at 7–8% is more aggressive but sustainable if corpus keeps growing.