Portfolio Rebalancing Calculator India 2026
Optimize Your Asset Allocation
Portfolio Rebalancing Calculator
₹
₹
Ten Lakhs rupees
Current total value of your investment portfolio
₹
Four Lakhs Fifty Thousand rupees
45.0%
%
₹
Two Lakhs Fifty Thousand rupees
25.0%
%
₹
Two Lakhs rupees
20.0%
%
₹
One Lakh rupees
10.0%
%
Portfolio Status Dashboard
Rebalance Required
₹1,00,000
Est. Transaction Cost
₹500
Portfolio Balance:
Perfectly BalancedRebalancing Actions Required
Large Cap Equity
45.0% → 40.0%
No Action Required
Mid/Small Cap Equity
25.0% → 30.0%
No Action Required
Debt/Bonds
20.0% → 20.0%
No Action Required
Gold/Commodities
10.0% → 10.0%
No Action Required
Rebalancing Tips
- • Consider tax implications before rebalancing in taxable accounts
- • Use new contributions to rebalance instead of selling
- • Review and rebalance quarterly or semi-annually
- • Don't over-rebalance - minor deviations are normal
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Current vs Target Allocation
Current Allocation
Target Allocation
Current Allocation
Large Cap Equity
4500.0%Mid/Small Cap Equity
2500.0%Debt/Bonds
2000.0%Gold/Commodities
1000.0%Target Allocation
Large Cap Equity
4000.0%Mid/Small Cap Equity
3000.0%Debt/Bonds
2000.0%Gold/Commodities
1000.0%Allocation Deviation Analysis
Portfolio Value
₹10,00,000
Rebalance Amount
₹1,00,000
Diversification
4 Assets
Portfolio Health Analysis
Portfolio Health
Excellent
Assets Out of Balance
2 of 4
Avg Deviation
2.5%
Diversification Score
80/100
Asset Allocation Details
| Asset Class | Current Value | Current % | Target % | Target Value | Deviation | Action Required |
|---|---|---|---|---|---|---|
| Large Cap Equity | ₹4,50,000 | 4500.0% | 4000.0% | ₹4,00,000 | 500.0% | SELL ₹50,000 |
| Mid/Small Cap Equity | ₹2,50,000 | 2500.0% | 3000.0% | ₹3,00,000 | +500.0% | BUY ₹50,000 |
| Debt/Bonds | ₹2,00,000 | 2000.0% | 2000.0% | ₹2,00,000 | +0.0% | NO ACTION |
| Gold/Commodities | ₹1,00,000 | 1000.0% | 1000.0% | ₹1,00,000 | +0.0% | NO ACTION |
| TOTAL | ₹10,00,000 | 100.00% | 100.00% | ₹10,00,000 | - | 2 ACTIONS |
Rebalancing Instructions
Assets to Buy
Mid/Small Cap Equity₹50,000
Assets to Sell
Large Cap Equity₹50,000
📝 Implementation Tips:
- • Execute all trades on the same day to maintain target allocation
- • Consider using any fresh investments to rebalance before selling existing holdings
- • Be mindful of exit loads and tax implications for debt funds
- • Review your portfolio quarterly and rebalance when deviations exceed threshold
Portfolio Rebalancing Calculation Formulas
Understand the mathematical formulas used to calculate portfolio rebalancing and asset allocation.
Rebalancing Amount = (Target % × Total Portfolio) - Current AmountExample:
Target 60% equity allocation in ₹10L portfolio, currently ₹5L
(0.60 × 10,00,000) - 5,00,000
= ₹1,00,000 to invest in equity
Variables:
Target % - Target allocation percentage for asset class
Total Portfolio - Total portfolio value
Current Amount - Current amount in asset class
Drift % = |Current % - Target %|Example:
Current 70% equity, target 60% equity
|70 - 60|
= 10% drift from target
Variables:
Current % - Current allocation percentage
Target % - Target allocation percentage
These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.
Portfolio Rebalancing Best Practices
Expert strategies to optimize your asset allocation and maximize long-term returns
Set Clear Allocation Targets
Define your target asset allocation based on age, risk tolerance, and financial goals. A common rule is (100 - age)% in equity.
Review Regularly, Rebalance Thoughtfully
Review your portfolio quarterly but only rebalance when deviation exceeds 5-10%. Avoid over-rebalancing which increases costs.
Use Fresh Money First
Before selling assets, try to rebalance by directing new investments to underweight asset classes. This saves on taxes and costs.
Consider Tax Implications
Be mindful of short-term vs long-term capital gains tax. Consider tax-loss harvesting and holding periods before rebalancing.
Why Portfolio Rebalancing Matters
Benefits of Regular Rebalancing
- Risk Control: Maintains your desired risk level over time
- Disciplined Investing: Forces you to buy low and sell high
- Goal Alignment: Keeps investments aligned with objectives
- Volatility Reduction: Smoothens portfolio performance
When to Avoid Frequent Rebalancing
- High Costs: When transaction costs exceed benefits
- Tax Implications: Triggering unnecessary capital gains
- Small Deviations: Minor allocation differences (< 5%)
- Market Timing: Trying to time market movements
Portfolio Rebalancing FAQ - India 2026
Everything you need to know about portfolio rebalancing, asset allocation, and investment optimization in India.
What is portfolio rebalancing and why is it important?
Portfolio rebalancing is the process of realigning your investment portfolio to maintain your desired asset allocation. It's important because:
• Maintains Risk Profile: Keeps your portfolio aligned with your risk tolerance
• Enforces Discipline: Forces you to buy low and sell high automatically
• Reduces Volatility: Helps smooth out portfolio performance over time
• Goal Alignment: Ensures your portfolio stays on track for your financial goals
For example, if your target allocation is 70% equity and 30% debt, but market movements have made it 80% equity and 20% debt, rebalancing would involve selling some equity and buying debt to restore the 70:30 ratio.
How often should I rebalance my portfolio?
The frequency of rebalancing depends on your investment strategy and market conditions:
Calendar-based Rebalancing:
• Quarterly: Most common approach for active investors
• Semi-annually: Good balance between discipline and costs
• Annually: Suitable for long-term investors with low-cost funds
Threshold-based Rebalancing:
• 5% deviation: Conservative approach, more frequent rebalancing
• 10% deviation: Moderate approach, balances costs and discipline
• 15% deviation: Aggressive approach, less frequent rebalancing
Best Practice: Combine both methods - review quarterly but only rebalance if deviation exceeds your threshold (typically 5-10%).
Who should consider portfolio rebalancing?
Portfolio rebalancing is beneficial for:
✅ Should Rebalance:
• Investors with diversified portfolios across multiple asset classes
• Those with long-term investment horizons (5+ years)
• Investors who want to maintain consistent risk levels
• People following strategic asset allocation strategies
• Disciplined investors who can stick to the process
⚠️ Consider Carefully:
• Very short-term investors (less than 2 years)
• Those investing in tax-inefficient accounts with high transaction costs
• Investors with very small portfolio values (under ₹1 lakh)
• People who frequently change their investment strategy
❌ Should Avoid:
• Market timers who prefer tactical allocation changes
• Investors who cannot handle temporary losses from selling winners
What are the costs associated with portfolio rebalancing?
Rebalancing involves several costs that you should consider:
Transaction Costs:
• Brokerage: 0.1-0.5% for equity transactions
• Exit Load: 0.25-1% for mutual funds (if redeemed before lock-in)
• STT: 0.001% on equity delivery, 0.017% on equity intraday
Tax Implications:
• Short-term Capital Gains: 15% on equity, slab rate on debt (if held <3 years)
• Long-term Capital Gains: 10% on equity gains >₹1 lakh, 20% with indexation on debt
Impact Cost:
• Bid-ask spreads when trading securities
• Market impact for large transactions
Cost Minimization Tips:
• Use fresh investments to rebalance instead of selling
• Rebalance in tax-advantaged accounts (ELSS has 3-year lock-in)
• Consider tax-loss harvesting opportunities
How do I determine the right asset allocation for rebalancing?
Your asset allocation should be based on several key factors:
Age-based Allocation (Thumb Rule):
• Equity % = 100 - Your Age
• Example: 30-year-old should have 70% equity, 30% debt
Risk Tolerance Assessment:
• Conservative: 30-50% equity, 50-70% debt
• Moderate: 50-70% equity, 30-50% debt
• Aggressive: 70-90% equity, 10-30% debt
Goal-based Allocation:
• Short-term goals (<3 years): Higher debt allocation
• Medium-term goals (3-7 years): Balanced allocation
• Long-term goals (>7 years): Higher equity allocation
Sample Balanced Portfolio:
• Large Cap Equity: 40%
• Mid/Small Cap Equity: 20%
• International Equity: 10%
• Debt/Bonds: 25%
• Gold/REITs: 5%
Adjust based on your specific circumstances and review annually.
Should I rebalance frequently in volatile markets?
Volatile markets require a balanced approach to rebalancing:
During High Volatility:
• Stick to your schedule: Don't abandon your rebalancing strategy
• Consider wider thresholds: Maybe 10-15% instead of 5% to avoid over-trading
• Use fresh money: Add new investments to underweight assets
• Stay disciplined: Resist the urge to time the market
Benefits in Volatile Markets:
• Forces contrarian investing (buy low, sell high)
• Reduces emotional decision-making
• Maintains long-term perspective
• Captures volatility premium
When to Pause:
• Extreme market stress (like March 2020)
• Personal financial emergencies
• Major life changes affecting goals
Pro Tip: In highly volatile periods, consider rebalancing in smaller increments over 2-3 months rather than all at once.
What are the tax implications of portfolio rebalancing in India?
Understanding tax implications is crucial for effective rebalancing:
Capital Gains Tax:
• Equity STCG: 15% if held <1 year
• Equity LTCG: 10% on gains >₹1 lakh if held >1 year
• Debt STCG: As per income tax slab if held <3 years
• Debt LTCG: 20% with indexation if held >3 years
Tax-Efficient Rebalancing Strategies:
• Use fresh investments: Add money to underweight assets
• Tax-loss harvesting: Sell losing investments to offset gains
• Hold in ELSS: 3-year lock-in but tax-free after that
• Timing: Harvest losses in March, book gains in April
Account-based Strategy:
• Taxable accounts: Hold tax-efficient equity funds
• PPF/EPF: Hold debt and gold allocations
• ELSS: Use for equity allocation with tax benefits
Example: Instead of selling performing equity to buy debt, use new SIP money to increase debt allocation over time.
Can I use SIPs for portfolio rebalancing?
SIPs can be an excellent tool for gradual portfolio rebalancing:
SIP Rebalancing Strategy:
• Pause over-allocated assets: Stop SIPs in overweight categories
• Increase under-allocated assets: Start or increase SIPs in underweight areas
• New SIPs: Direct fresh money to restore balance
• Step-up SIPs: Increase contributions to lagging asset classes
Benefits of SIP Rebalancing:
• Cost-effective: No transaction costs for fresh investments
• Tax-efficient: No capital gains tax on new investments
• Gradual: Smoothens rebalancing over time
• Disciplined: Automated approach reduces emotions
Example Scenario:
Target: 70% equity, 30% debt
Current: 80% equity, 20% debt
Action:
• Pause equity SIPs for 6 months
• Double debt fund SIPs
• Resume balanced SIPs once allocation normalizes
Limitation: Only works if you have regular fresh money to invest.
How does portfolio rebalancing work during retirement?
Rebalancing during retirement requires special considerations:
Modified Approach:
• Income first: Ensure adequate liquid funds for expenses
• Conservative shifts: Gradually move to lower-risk assets
• Bucket strategy: Separate short, medium, and long-term needs
Retirement-focused Allocation:
• Years 60-65: 40% equity, 60% debt/liquid
• Years 65-70: 30% equity, 70% debt/liquid
• Years 70+: 20% equity, 80% debt/liquid
Withdrawal Strategy:
• Systematic Withdrawal Plan (SWP): Regular income from balanced funds
• Asset harvesting: Sell from overperforming asset classes
• Sequence risk: Avoid selling equity during market downturns
Special Considerations:
• Healthcare inflation: Maintain some equity exposure
• Longevity risk: Plan for 25-30 years post-retirement
• Emergency fund: 2-3 years of expenses in liquid funds
Pro Tip: Use dividends and interest for rebalancing instead of selling assets wherever possible.
What tools and platforms can help with portfolio rebalancing?
Several tools can simplify portfolio rebalancing:
Robo-advisors with Auto-rebalancing:
• Kuvera: Free platform with rebalancing alerts
• Groww: Portfolio tracking and rebalancing suggestions
• ET Money: Asset allocation analysis tools
• Piggy: Goal-based portfolio management
Manual Tracking Tools:
• Excel/Google Sheets: Custom portfolio tracker
• Valueresearch: Portfolio X-ray analysis
• Morningstar: Portfolio analysis tools
• Personal Capital: Free portfolio tracker (international)
Built-in Rebalancing:
• Multi-asset funds: Automatic rebalancing by fund managers
• Balanced funds: Built-in asset allocation maintenance
• Target-date funds: Age-appropriate automatic allocation
DIY Approach:
• Portfolio rebalancing calculator: Like this one!
• Spreadsheet templates: Track allocation vs targets
• Mobile apps: Many brokers offer portfolio analysis
Recommendation: Start with free tools and upgrade to paid services only if you have a large, complex portfolio.
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