XIRR (Extended Internal Rate of Return) is the annualised return of an investment that accounts for the exact date and amount of every cash flow — every SIP instalment, top-up and withdrawal.
Why a simple return misleads you
If you add money throughout the year, a simple "total return %" is meaningless — it does not know that half your capital was only invested for two months. XIRR weights each rupee by how long it was actually working, giving you the true annual rate of growth. It is the only fair way to compare your portfolio to a benchmark or another investment.