NAV means net asset value. It is the price of one unit of a mutual fund on a given day. The fund adds up the market value of what it holds, subtracts what it owes, and divides by the number of units. That is the NAV. You see it on the fund’s page and on your statement.
When you invest, the rupees you pay are divided by that day’s NAV to give the number of units. When you sell, the units are multiplied by the NAV on the sale day, minus any exit cost the scheme still charges. A SIP does this every month. The rupees stay the same. The units change because the NAV changed.
A higher NAV does not mean a dearer fund in the way a higher share price sometimes tempts people to think. A fund that started years ago can have a high NAV simply because it has been compounding. A new fund can start near ₹10. What you own is a slice of the portfolio, not a lucky round number.
NAV is not a return. The return is the change in NAV over time, plus any dividend you took out. CAGR and XIRR are ways to state that change. NAV itself is a price. It is also not the tax. Tax uses the rupee gain, which is sale value minus cost. The NAVs are how those rupee amounts were produced.
A worked example
A monthly SIP of ₹10,000 buys as many units as ₹10,000 divided by that day’s NAV. This site does not publish a fund’s NAV, so the glossary does not invent one. What the SIP engine can say is the rupee result of doing that every month.
At a planning rate of 12% for 15 years, with no step-up, you invest ₹18,00,000. The estimated value is ₹50,45,760. The gain is ₹32,45,760. Those rupees are the NAVs of many dates, added up. Change the rate and you are saying the NAVs grew differently.
A single lump is easier to see. ₹1,00,000 growing to ₹2,50,000 in 10 years is a CAGR of 9.6%. If that end value is a sale of equity units, the gain of ₹1,50,000 is what section 198 looks at, not the CAGR and not the last NAV by itself. Use the SIP calculator for the monthly rupees and the CAGR calculator for a start and an end. The SIP guide talks about the habit. The capital gains guide talks about the sale.
Mistakes people make
- Picking a fund because the NAV is ₹10, or avoiding one because the NAV is ₹200.
- Treating NAV as the return.
- Expecting a SIP to buy the same number of units every month.
- Using today’s NAV as the cost of units you bought years ago.
- Forgetting that a sale of those units can be partly short-term if the last instalments are under 12 months old.
The tax, when you sell
NAV is not a section of the Act. The gain in rupees is. Equity-oriented units use section 196 or section 198 (these were sections 111A and 112A). The capital gains calculator asks for the rupees, which already have the NAVs inside them.
Questions
Does a higher NAV mean a more expensive fund?
No. NAV is the price of one unit, which depends on how long the fund has been running and how it has grown. A newer fund can have a lower NAV and still be the riskier or the costlier one. Compare the portfolio and the expense ratio, not the NAV alone.
How many units does a SIP buy?
Units equal the rupees divided by that day’s NAV. A SIP of ₹10,000 buys ₹10,000 divided by the NAV. Over 15 years at 12% the engine’s value of those units is ₹50,45,760. This page does not invent a NAV.
Is NAV the capital gain?
No. The gain is the sale proceeds minus the cost of the units. In the equity example, units that cost ₹1,00,000 and sell for ₹4,00,000 produce a gain of ₹3,00,000. The NAVs on the two dates are inside those two rupee figures.
Sources
Figures checked 28 Oct 2026.