Inflation Calculator India 2025

Calculate inflation impact on purchasing power, compare investment returns, and understand how your money's value changes over time with India-specific inflation rates

Current Cost

₹

₹10K₹1Cr

Beat Inflation with Smart Investments

See how ₹1,00,000 grows with different investments over 10 years

Inflation

₹1,79,085

Inflation impact

Fixed Deposit

₹1,96,715

✓ Beats inflation

PPF

₹1,98,561

✓ Beats inflation

Equity

₹3,10,585

✓ Beats inflation

Key Insight

Equity investments could grow your ₹1,00,000 to ₹3,10,585, beating inflation by ₹1,31,500!

Year-wise Breakdown

Detailed inflation impact over 10 years

Initial Amount

₹1,00,000

Future Amount

₹1,79,085

Total Inflation

₹79,085

Power Loss

4416.0%

Year	Calendar Year	Start Amount	Inflation Impact	End Amount	Cumulative Inflation	Purchasing Power
1	2026	₹1,00,000	+₹6,000	₹1,06,000	₹6,000	94.34%
2	2027	₹1,06,000	+₹6,360	₹1,12,360	₹12,360	89.00%
3	2028	₹1,12,360	+₹6,742	₹1,19,102	₹19,102	83.96%
4	2029	₹1,19,102	+₹7,146	₹1,26,248	₹26,248	79.21%
5	2030	₹1,26,248	+₹7,575	₹1,33,823	₹33,823	74.73%
6	2031	₹1,33,823	+₹8,029	₹1,41,852	₹41,852	70.50%
7	2032	₹1,41,852	+₹8,511	₹1,50,363	₹50,363	66.51%
8	2033	₹1,50,363	+₹9,022	₹1,59,385	₹59,385	62.74%
9	2034	₹1,59,385	+₹9,563	₹1,68,948	₹68,948	59.19%
10	2035	₹1,68,948	+₹10,137	₹1,79,085	₹79,085	55.84%

Note: This calculation assumes a constant inflation rate of 600.0% throughout the period. Actual inflation rates vary annually and may differ from the assumed rate.

Did You Know?

• The Rule of 72: Divide 72 by the inflation rate to find how many years it takes for prices to double. At 6% inflation, prices double every 12 years!

• Healthcare Inflation: Medical costs in India inflate at 10-15% annually, much higher than general inflation. Plan accordingly for future medical expenses.

• Real vs Nominal Returns: If your investment returns 8% but inflation is 6%, your real return is only 2%. Always consider inflation-adjusted returns.

• Education Inflation: Education costs typically inflate at 9-12% per year. A ₹5 lakh course today could cost ₹15-20 lakhs in 15 years.

Inflation Calculator FAQs

Everything you need to know about inflation impact, purchasing power, and real vs nominal returns

What is inflation and how does it affect my money?

Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. For example, if inflation is 6%, an item costing ₹100 today will cost ₹106 next year. This means your money loses value over time, making it crucial to invest in assets that beat inflation.

What is the current inflation rate in India?

India's retail inflation (CPI) typically ranges between 4-7%. However, different categories have varying rates: food inflation tends to be higher (7-9%), while core inflation is usually lower (4-6%). Healthcare and education costs often inflate faster than the general CPI.

How can I protect my savings from inflation?

To beat inflation, invest in assets that historically provide returns higher than the inflation rate:

Equity Mutual Funds: 10-12% average returns over long term
PPF: 7.1% tax-free returns (beats 6% inflation effectively)
Gold: Traditional inflation hedge, 8-10% long-term returns
Real Estate: 8-12% appreciation in good locations
Index Funds: 10-12% returns tracking market growth

Pro Tip: A diversified portfolio with 60% equity, 30% debt, and 10% gold typically beats inflation over 10+ years.

What is the difference between nominal and real returns?

Nominal return is the percentage increase in your investment without considering inflation. Real return is what remains after adjusting for inflation. For example, if you earn 8% on an FD but inflation is 6%, your real return is only 2%. Always focus on real returns to understand actual wealth creation.

How does compounding help fight inflation?

Compounding helps your investments grow exponentially, potentially outpacing inflation over time. For example, ₹1 lakh invested at 12% for 20 years becomes ₹9.6 lakhs, while the same amount at 6% inflation becomes ₹3.2 lakhs. The 6% gap (12%-6%) is your real wealth creation through compounding.

Should I consider inflation when planning retirement?

Absolutely! Inflation is critical in retirement planning. Here's why:

Medical Inflation: Healthcare costs inflate at 10-15% annually in India
Longer Lifespan: You may need funds for 25-30 years post-retirement
Fixed Income Impact: Pension value erodes significantly over time
Lifestyle Maintenance: Current expenses will double every 12 years at 6% inflation

Example: If you need ₹50,000/month today, you'll need ₹1.6 lakhs/month after 20 years at 6% inflation!

What are the tax implications of inflation-beating investments?

Tax treatment varies by investment type:

Tax-Free Options

PPF: Completely tax-free (EEE status)
ELSS: Tax deduction on investment, LTCG above ₹1L taxed at 10%
NPS: Tax benefits on contribution, partial tax-free withdrawal

Taxable Options

FD: Interest taxed as per income slab (can be 30%+)
Equity Mutual Funds: LTCG above ₹1L at 10%, STCG at 15%
Real Estate: LTCG at 20% with indexation benefit

How to calculate real returns after inflation?

Use this formula: Real Return = ((1 + Nominal Return) / (1 + Inflation Rate)) - 1. For example, if you earn 10% but inflation is 6%, your real return = ((1.10 / 1.06) - 1) = 3.77%. This shows your actual purchasing power increase.

Inflation Impact Calculation Formulas

Understand the mathematical formulas used to calculate inflation impact on purchasing power and investments.

Inflation Impact on Purchasing Power

Calculate how inflation reduces your purchasing power over time.

Future Value = Present Value × (1 + inflation rate)^years

Example:

₹1,00,000 expense at 6% inflation for 10 years

1,00,000 × (1 + 0.06)^10

= ₹1,79,000

Variables:

Present Value - Current amount or expense

Inflation Rate - Annual inflation rate

Years - Time period in years

Real Returns Calculation

Calculate real returns after adjusting for inflation.

Real Return = ((1 + Nominal Return) / (1 + Inflation Rate)) - 1

Example:

12% investment return with 6% inflation

((1 + 0.12) / (1 + 0.06)) - 1

= 5.66% real return

Variables:

Nominal Return - Investment return before inflation

Inflation Rate - Annual inflation rate

These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.