What does an inflation calculator do?

It converts money between today's terms and a future year's terms at an assumed rate. That lets you see both what a purchase will cost later and what an amount held today would still buy in real terms.

What inflation rate should I use for India?

The Reserve Bank of India targets consumer price inflation of 4% with a tolerance band of 2% to 6%, so a figure in that range is a common planning assumption. For goals dominated by education or healthcare costs, many people assume a higher rate. The choice is yours to justify — the calculator does not pick one for you.

What is ₹1 lakh today worth in 10 years?

At 6% inflation, about ₹55,839 in today's purchasing power — roughly 44% less. Enter your own amount and rate above to see the figure for your case, along with the year-by-year path.

What return do I need just to keep up with inflation?

Exactly the inflation rate, before tax. Anything less and the real value of your money is falling even though the rupee figure is rising. After tax the required return is higher still, since tax applies to the nominal gain rather than the real one.

Is future inflation guaranteed to be what I enter?

No. Inflation is not predictable, and this calculator makes no forecast. It shows the arithmetic consequence of the rate you assumed, which is why it is worth running your plan at more than one rate.

How do I apply this to an investment projection?

Take the projected corpus from the SIP, lumpsum or compound interest calculator, enter it here as the current amount with the same number of years, and read the purchasing-power figure. That is roughly what the corpus would be worth in today's money.

Investment · FINANCIAL TOOLS

Inflation Calculator

See what today's money would cost in future, and what it would still buy if left uninvested.

Understand the calculation

Calculation logic, formula, example and guardrails behind the estimate.

How it works

The cost view compounds the amount forward: something costing ₹X today costs X × (1 + i)^n after n years at inflation rate i. This is the same compound growth used by the investment calculators, applied to prices rather than portfolios.

The purchasing-power view runs the same factor backwards. An amount left uninvested still says ₹X on the note, but what it buys is X ÷ (1 + i)^n in today's terms. The two views are exact inverses, so they never disagree.

More detail

The break-even return is simply the inflation rate. An investment returning less than inflation is losing real value even while its rupee figure rises, which is the single most useful thing this calculator surfaces.

One average rate is applied to every year. Actual inflation moves around, and the inflation you personally experience depends on what you buy — which is why the rate here is an input rather than a fixed number.

Once you know what a goal will cost in future rupees, work out the monthly investment it needs.

To see whether an investment outpaces the rate you assumed here, project it with the compound interest calculator.

Formula

Future cost = P × (1 + i)ⁿ Purchasing power = P ÷ (1 + i)ⁿ

Both use the same factor. The first asks what a purchase will cost; the second asks what an unchanged amount will buy, expressed in today's money.

P: The amount, or the cost of the purchase, in today's rupees
i: Assumed average annual inflation as a decimal (6% is 0.06)
n: Number of years ahead
Future cost: What the same purchase costs in that year's rupees
Purchasing power: What the unchanged amount still buys, in today's rupees

Worked example

₹10,00,000 today, at an assumed 6% average inflation, over 10 years.

01Inflation factor(1.06)¹⁰ ≈ 1.7908
02Future cost₹10,00,000 × 1.7908 ≈ ₹17,90,847
03Increase in cost≈ ₹7,90,847
04Purchasing power₹10,00,000 ÷ 1.7908 ≈ ₹5,58,395
05Purchasing power lost≈ ₹4,41,605, or about 44%
06Break-even return needed6% a year

Left in a drawer, ₹10 lakh loses roughly 44% of its buying power over a decade at 6% inflation. Put differently, you would need about ₹17.9 lakh then to live as ₹10 lakh lets you live now.

Important considerations

01
Use it on every long-horizon projection
A projected corpus from any investment calculator is in future rupees. Running that figure through this calculator converts it back to today's terms, which is the number your goal was actually set in.
02
Real return is what matters
A 9% nominal return with 6% inflation is about a 3% real return. Comparing nominal returns across periods with different inflation rates compares different things.
03
Your personal inflation rate is not the headline one
If a large share of your spending is on school fees, medical care or rent in a major city, your experienced inflation may run well above the published CPI figure. Consider entering a rate above the headline number for those goals.
04
Long horizons magnify small differences
The gap between assuming 5% and 7% looks minor over three years and becomes very large over thirty. If a plan is sensitive to the assumption, run it at both ends.
05
This is not a prediction
Nothing here forecasts inflation. It shows the arithmetic consequence of a rate you chose, which is a planning tool rather than a view on where prices are heading.

Limitations

It applies a single average rate. Real inflation varies year to year, and periods of unusually high or low inflation change the outcome materially.
Headline CPI is an average across a basket that may look nothing like your spending. Education and healthcare costs in India have historically risen faster than the headline figure.
It is not a forecast. Future inflation is genuinely unknown, and the rate you enter is an assumption you own.
It ignores any return the money might earn — the point of the break-even figure is precisely that money should usually not sit idle.

Frequently asked questions

Common questions about the inflation calculator and the assumptions behind it.

Next useful checks

Move from this result to the next decision without hunting through the full calculator list.

Goal-Based SIP CalculatorTurn a target amount into a monthly investment.SIP vs Lumpsum CalculatorCompare investing all at once against monthly investing.CAGR CalculatorConvert start and end values into an annual return.

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Disclaimer

This calculator is provided for general information and planning only. It is not investment, tax or legal advice, and it does not take your personal circumstances into account. Outputs are estimates based on the assumptions stated on this page, exclude taxes and charges unless said otherwise, and market-linked returns are not guaranteed — the value of investments can fall as well as rise. Lending terms, rates and eligibility are decided by the lender. For advice on your own situation, speak to a qualified professional, several of whom you can consult on Finvestalk.