Tool

Inflation Calculator

The ₹100 note in your pocket does not change, but what it buys shrinks every year. At the 5–7% inflation India has averaged, a ₹50 lakh retirement corpus twenty years from now buys roughly what ₹15 lakh buys today — which is the whole reason a "safe" savings account can still leave you poorer.

Three modes: what something will cost later, what a future amount is worth in today's money, and how much buying power an older sum has already lost. Hover the ? on any field if you're unsure what to enter. The full explanation is below — the inflation rate you pick matters more than the output.

What will ₹X today cost in the future?

Amount Today (₹) ? What the thing costs right now — a car, a year of school fees, one month of household spending.

Years ? How far into the future you want to look. 10 years for a school-fee bill, 25–30 if you are thinking about retirement.

Inflation (%/yr) ? How fast you expect prices to rise each year. India’s CPI has averaged 5–7%; school fees and hospital bills have run closer to 8–10%.

Future Cost ? The same purchase, priced in the rupees of that future year. This is the number you have to save towards, not the amount you typed in.

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India's average CPI inflation has been ~5–7% over the past decade. Default 6%.

What inflation actually does to your money

Inflation means the same ₹1,000 note buys less every year. If inflation is 6%, something that costs ₹1,000 today will cost ₹1,060 next year, ₹1,124 the year after, and so on. Over a decade, the same goods cost nearly double.

This is why "keeping money safe" in a savings account paying 3.5% actually loses you purchasing power every year — the interest doesn't keep up with prices rising.

The formula

Future Cost of Something Future Cost = Present Cost × (1 + Inflation Rate ÷ 100)^Years

Example: A car that costs ₹8 lakhs today, at 6% inflation over 10 years →
Future Cost = 8,00,000 × (1.06)¹⁰ = 8,00,000 × 1.791 = ₹14.3 lakhs

In other words: if you're saving to buy that car in 10 years, you need to save for ₹14.3 lakhs, not ₹8 lakhs.

Real value — what a future rupee is worth today

If someone promises you ₹50 lakhs in 20 years, that sounds great. But ₹50 lakhs in 2046 is worth far less than ₹50 lakhs today. To find the "real" value, you reverse the inflation calculation.

Real Value Today of a Future Amount Real Value = Future Amount ÷ (1 + Inflation Rate ÷ 100)^Years

Example: ₹50 lakhs in 20 years at 6% inflation →
Real Value = 50,00,000 ÷ (1.06)²⁰ = 50,00,000 ÷ 3.207 = ₹15.6 lakhs in today's money

So when planning retirement: if you think ₹50 lakhs 20 years from now is enough, it's actually equivalent to ₹15.6 lakhs today.

Frequently Asked Questions

What is India's average inflation rate?

India's CPI inflation has averaged 5–7% over the past decade. Headline inflation fluctuates — food prices spike (onions, vegetables), then stabilise. For long-term planning, 6% is a reasonable central assumption. Education and healthcare inflate at 10–12%.

How to protect your money from inflation?

Any investment returning more than inflation in real terms works. Equity mutual funds (historically 12–14% CAGR) beat 6% inflation by 6–8% per year — that gap is where real wealth is built. FDs at 7% with 30% tax applied give ~4.9% net, barely above inflation and possibly below in high-inflation years.

Does real estate beat inflation in India?

In major cities, residential real estate has broadly tracked inflation over 20 years, with some periods of outperformance and some of underperformance. Rental yield (2–3%) is below FD rates. Equity has outperformed real estate over most 15+ year periods in India.

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