Question 1

Does this tell me which fund to buy?

Accepted Answer

No, and nothing that claims to should be trusted. It tells you which **SEBI categories** to hold and in what weight — which is the decision that actually drives your outcome. Picking the scheme inside a category is the smaller decision, and the calculator gives you a shortlist checklist for each one (expense ratio, portfolio checks, what has historically gone wrong in that category). Always buy the **direct plan**; the regular plan hands roughly 0.5-1% a year to a distributor for the same portfolio.

Question 2

Why does my timeline override my risk appetite?

Accepted Answer

Because appetite cannot buy time. Indian equity indices have fallen 30-40% more than once in the last twenty years and taken years to recover. If your money is needed in three years, a fall in year two is realised as a loss whatever your temperament — so the calculator applies a hard **equity ceiling by horizon** (0% under 1 year, 20% under 3, 45% under 5, 70% under 7, 85% under 10, unrestricted beyond) that can only ever reduce the equity your risk score asked for, never raise it.

Question 3

Why am I not being pointed at an ELSS fund?

Accepted Answer

ELSS only earns its 3-year lock-in if you can actually claim **Section 80C**, and 80C does not exist under the new regime — which has been the default since Budget 2025 and is the better deal for most salaried filers. Under the new regime an ELSS fund gives you the lock-in and nothing in return, so the core equity holding is a plain **flexi cap fund**: same asset class, same manager pool, no lock-in. Tell the calculator you are on the old regime with 80C headroom left and it will substitute ELSS back in.

Question 4

What happened to Retirement Funds and Children's Funds?

Accepted Answer

SEBI **abolished the Solution-Oriented category on 26 February 2026**. Those schemes are closed to fresh investment and are being merged into comparable schemes after unitholder approval — if you hold one, expect a merger notice from your AMC and an exit window. The replacement is the new **Life Cycle Fund**: a single fund with a maturity year in its name and a SEBI-mandated glide path that steps equity down from 65-95% to 5-20% as the target date approaches. This calculator offers one as an alternative to the whole mix wherever your goal qualifies.

Question 5

Is the monthly SIP figure a promise?

Accepted Answer

No. It is arithmetic on a **planning assumption**, not a forecast. Each category carries a conservative long-run return band; the headline uses the weighted **midpoint** of those bands. Open the workings and you will also see what the SIP becomes if every band lands at its **bottom** simultaneously — that gap is the honest error bar, and it is the number to budget against if the goal is one you cannot miss. Review the plan annually and step the SIP up with your income.

Question 6

Why does a short-term plan hold an arbitrage fund?

Accepted Answer

Tax. An arbitrage fund hedges every cash position with a matching futures short, so its **net market exposure is zero** — it behaves like a debt fund — but it holds over 65% gross equity, so it is **taxed as equity-oriented**. For anyone in the 20% or 30% bracket that beats a liquid fund's slab-rate treatment on a near-identical return. Give it at least three to six months, though: the exit-load window and the volatility of the cash-futures spread make it unsuitable for genuinely overnight money.

Question 7

How are debt funds taxed now?

Accepted Answer

Every pure debt category is a **specified mutual fund under Section 50AA**: the gain is deemed short-term however long you hold it, taxed at your **slab rate**, with no indexation and no long-term relief. There is no holding period that improves it. Equity-oriented schemes are the opposite — 20% under s.111A inside 12 months, 12.5% under s.112A beyond, with a **₹1.25 lakh** annual exemption. Hybrids sitting between 35% and 65% equity fall in a third bucket: 12.5% long-term, no exemption, and the clock is 24 months for unlisted units.

Question 8

Should I just buy one Life Cycle Fund instead of four funds?

Accepted Answer

It is a genuinely reasonable choice if you know you will not rebalance, because the de-risking is mandatory rather than discretionary and happens inside the fund with no tax event. The catch is the **exit load: 3% in year 1, 2% in year 2, 1% in year 3** — far steeper than any other open-ended category — so only use money you are certain you will not need early. Compare its total expense ratio against simply holding a flexi cap fund and a short duration fund yourself and rebalancing once a year.

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