XIRR vs CAGR in India (and Why Tax Impact Matters)
An explainer on XIRR vs CAGR for Indian investors: when to use each return metric and why pairing it with LTCG/STCG tax-impact checks leads to better, post-tax investment decisions.
Direct answer
Use CAGR for single lump-sum investments without intermediate cash flows. Use XIRR for real-world portfolios with multiple buys/sells/SIPs. For decision quality, pair return metric with post-tax outcome checks through LTCG/STCG calculators.
Why this matters
Many investors optimize only gross return. In practice, the better decision is often the one with better after-tax return and cash-flow timing. That is why XIRR + tax planning beats simple percentage comparisons.
Practical workflow
- Measure portfolio-level performance using XIRR.
- Estimate exit-tax outcomes with LTCG and STCG calculators.
- Choose actions based on post-tax, time-adjusted return.
Tools to apply this today
- XIRR Calculator for timing-aware return measurement.
- LTCG Tax Calculator for long-term exits.
- STCG Tax Calculator for short-term exits.
Track your portfolio the smart way
StockIQ imports from any Indian broker, computes XIRR across your whole portfolio, and plans your LTCG/STCG capital-gains tax in minutes. Start free.