Worked Example
Nifty-50 vs Mid-cap-stocks: which builds more wealth over 15 years?
Scenario
Anjali, age 35, mid-career marketing manager in Mumbai, ₹18 lakh annual income, married with one child, ₹70K monthly household expenses
Inputs
- Years
- 15
- Amount INR
- 5,00,000
- Nifty-50 tax %
- 12.5
- Nifty-50 return %
- 11
- Mid-cap-stocks tax %
- 12.5
- Mid-cap-stocks return %
- 14
Calculation
- 1.
Nifty-50 effective post-tax rate
11% × (1 − 12.5% tax) → 9.63%
- 2.
Mid-cap-stocks effective post-tax rate
14% × (1 − 12.5% tax) → 12.25%
- 3.
Nifty-50 corpus at year 15
₹5L × (1+0.096)^15 → ₹19.84 L
- 4.
Mid-cap-stocks corpus at year 15
₹5L × (1+0.122)^15 → ₹28.30 L
- 5.
Wealth difference
|1984331 − 2829862| → ₹8.46 L
Conclusion
Mid-cap-stocks wins by approximately ₹8.5 lakh over 15 years — driven by return rate.
Tradeoffs
Post-tax real returns matter more than nominal headline rates. Mid-cap-stocks loses more to taxation. Risk profiles differ too — guaranteed vs market-linked. Adjust for risk tolerance.