SWP: The Tax-Smart Way to Draw a Monthly Income in India

An SWP taxes only the gain portion of each redemption, not the whole payout — unlike FD interest

Equity-fund LTCG above ₹1.25 lakh a year is taxed at just 12.5%; under it, near tax-free

Stick to a 4-6% annual withdrawal rate so you don't outlive your corpus

Sequence-of-returns risk is real — keep 1-2 years of withdrawals in a low-volatility fund

Arbitrage funds give equity tax treatment with FD-like stability — a quiet SWP sweet spot

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