Starting with Rs 15,000 SIP, how you can buy Rs 22.75 lakh car in 6 years; see calculation
How to buy car through SIP investment: Cars are expensive, and people often buy them on loan. But since the value of the car depreciates and you pay interest on the loan, buying a car on loan may not be a good option. The other way can be to make a monthly systematic investment plan (SIP) in an equity mutual fund, withdraw it, pay long-term capital gains tax, and make a one-time payment to purchase car worth Rs 22.75 lakh.
Purchasing a car is a dream for many of us. A salaried class person aspires to purchase a car that he can use as a personal vehicle to travel to the office and to fetch his family to spend time outdoors. But purchasing a car in one go is not easy. Cars are expensive, and people often buy them on loan. But since the value of the car depreciates and you pay interest on the loan, buying a car on loan may not be a good option. The other way can be to make a monthly systematic investment plan (SIP) in an equity mutual fund, withdraw it, pay long-term capital gains tax, and make a one-time payment to purchase car worth Rs 22.75 lakh. , withdraw it, pay long-term capital gains tax, and make a one-time payment to purchase car worth Rs 22.75 lakh. Here's how you may do it:
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(Disclaimer: This article is not investment advice. Do your own due diligence or consult an advisor before making investment to buy a car).
SIP investment conditions
One can start Rs 15,000 monthly SIP and step up it by 10 per cent every year. They need to continue investment for 6 years. We are assuming one to make an investment in an equity mutual fund and expecting 12 per cent growth for every year.
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SIP investment conditions
We are assuming one to make an investment in an equity mutual fund and expecting 12 per cent growth for every year.
How SIP will grow
If you start with a Rs 15,000 monthly SIP and get a 12 per cent return on your investments, in the 1st year, your maturity amount will be Rs 2,55,330. Since you are increasing the SIP amount by 10 per cent every year. After the 6th year, your SIP will be Rs 32,210, and the maturity amount will be Rs 25,82,173, and your total investment will be Rs 13,88,810.
How SIP will grow
After the 6th year, your SIP will be Rs 32,210, and the maturity amount will be Rs 25,82,173, and your total investment will be Rs 13,88,810.
How SIP will grow
After the exemption limit of Rs 1.25 lakh, the total tax you will pay on it will be Rs 3,07,146.625. After paying long term capital gains, the remaining amount will be Rs 22,75,026.375.
Purchase car
With the above-mentioned method, you can have Rs 22.75 lakh. You can make a one-time payment to purchase the car.