NPS Calculator
Estimate your National Pension System corpus and the monthly pension it can generate. See how your contributions grow until retirement, how much you can withdraw tax-free, and what your annuity could pay each month.
Investing ₹10,000 a month in NPS at 10% until age 60 builds a corpus of about ₹2.28 Cr — you can take ₹1.37 Cr tax-free and the annuity gives an estimated monthly pension of around ₹45,587.
How the NPS Calculator works
Your monthly contributions are invested across equity and debt and compounded until retirement to build your total corpus. At age 60 you can take up to 60% as a tax-free lump sum, while the remaining portion (a minimum of 40%) buys an annuity. The annuity corpus multiplied by the annuity rate, divided over twelve months, gives your estimated monthly pension.
Lump sum vs annuity
The split between lump sum and annuity is the key retirement decision in NPS. A larger lump sum gives you flexibility and tax-free liquidity, while a larger annuity guarantees a steady lifelong income. Annuitising more than the mandatory 40% increases your monthly pension but reduces the tax-free cash you receive upfront.
Maximise your NPS benefits
- Claim the exclusive ₹50,000 deduction under Section 80CCD(1B), over and above 80C.
- Employer contributions under 80CCD(2) are deductible even under the new tax regime.
- Increase equity allocation early in your career to capture higher long-term growth.
- Compare annuity quotes across insurers — small rate differences add up over decades.
Frequently asked questions
What is the National Pension System (NPS)?
NPS is a voluntary, market-linked retirement scheme regulated by the PFRDA. You contribute regularly during your working years into a mix of equity, corporate bonds, and government securities. At retirement (age 60), you can withdraw up to 60% of the corpus tax-free as a lump sum and must use at least 40% to buy an annuity that pays you a monthly pension.
What are the tax benefits of NPS?
Under the old regime, NPS offers deductions under Section 80CCD(1) within the ₹1.5 lakh 80C ceiling, plus an exclusive additional ₹50,000 under Section 80CCD(1B). Employer contributions are deductible under 80CCD(2) — up to 14% of basic for government and 10% for private employees, and this 80CCD(2) benefit is also available under the new tax regime.
How much of my NPS corpus can I withdraw at 60?
At retirement you can withdraw up to 60% of the accumulated corpus as a tax-free lump sum. The remaining minimum 40% must be used to purchase an annuity from a PFRDA-empanelled insurer, which provides your monthly pension. You can choose to annuitise more than 40% if you want a larger pension.
Is the NPS pension taxable?
The 60% lump sum withdrawal at maturity is tax-exempt. However, the monthly annuity pension you receive is treated as income and taxed at your applicable slab rate in the year of receipt. The annuity rate offered by insurers typically ranges from 5.5% to 7%.
What returns can I expect from NPS?
NPS returns are market-linked and depend on your asset allocation. Historically, NPS equity (Tier I, Scheme E) funds have delivered around 10–12% over long periods, while bond and government securities funds return 7–9%. The blended return for a balanced allocation is often projected around 10%.
What is the difference between NPS Tier I and Tier II?
Tier I is the main retirement account — it is mandatory to start NPS, has a lock-in until age 60, and carries the tax benefits under 80CCD. Tier II is an optional, voluntary savings account with no lock-in, allowing you to withdraw anytime like a mutual fund, but it offers no tax deduction for private employees. You must have an active Tier I account before you can open Tier II.
Can I withdraw from NPS before 60?
Premature exit from Tier I is allowed after 3 years, but you can take only up to 20% as a lump sum and must use at least 80% to buy an annuity. Partial withdrawals of up to 25% of your own contributions are permitted after 3 years for specific needs like a child’s education, marriage, buying a home, or critical illness. If the corpus on premature exit is ₹2.5 lakh or less, you can withdraw the entire amount.
Is the ₹50,000 under 80CCD(1B) available in the new tax regime?
No. The extra ₹50,000 deduction under Section 80CCD(1B) and the ₹1.5 lakh 80CCD(1) benefit are only available in the old tax regime. Under the new regime, the only NPS-related deduction you can claim is the employer contribution under Section 80CCD(2) — up to 14% of basic salary. So self-contributors lose the NPS tax edge if they opt for the new regime.
What happens to my NPS corpus if I die before 60?
If a subscriber dies before 60, the entire accumulated corpus is paid to the nominee or legal heir as a lump sum, and they are not required to buy an annuity. The nominee can, if they wish, choose to continue the account or purchase an annuity instead. The lump sum received by the nominee on the subscriber’s death is tax-free.
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The results shown are estimates for illustration only, based on the inputs and assumptions you provide. Actual returns, interest, and tax depend on market conditions, prevailing rates, and applicable laws, which change over time. This is not investment, tax, or financial advice — please consult a qualified advisor before making decisions.