An NPS (National Pension System) calculator projects your retirement corpus based on your current age, monthly contribution, and expected return from the chosen asset allocation.
About this calculator
An NPS (National Pension System) calculator projects your retirement corpus based on your current age, monthly contribution, and expected return from the chosen asset allocation. NPS is a government-backed retirement scheme that offers one of the highest additional tax deductions in India — up to ₹50,000 under Section 80CCD(1B), over and above the ₹1.5 lakh 80C limit.
At retirement (age 60), NPS rules require you to buy an annuity with at least 40% of the corpus. The remaining 60% can be withdrawn as a tax-free lumpsum. The annuity portion generates a monthly pension for life. This calculator models all three components — total corpus, tax-free lumpsum, and estimated monthly pension — so you can see the full retirement picture.
Common uses
- Project retirement corpus under Tier 1 NPS based on current age and monthly contribution
- Estimate monthly pension from the compulsory annuity purchase at retirement
- Calculate annual tax savings under Section 80CCD(1B) for the extra ₹50,000 deduction
- Compare NPS vs PPF vs EPF for retirement planning based on returns and liquidity
- Decide between aggressive (E-class equity) and conservative (G-class government bond) allocation
Frequently asked questions
What is the difference between NPS Tier 1 and Tier 2?
Tier 1 is the mandatory pension account with lock-in until age 60. It offers tax deductions under 80CCD(1) up to 10% of salary and an additional ₹50,000 under 80CCD(1B). Tier 2 is a voluntary savings account with no lock-in or tax benefits (except for government employees). Most NPS tax planning involves Tier 1 contributions.
How much of the NPS corpus is tax-free at retirement?
At retirement (age 60), you can withdraw up to 60% of the NPS corpus as a tax-free lumpsum. The remaining 40% must be used to purchase an annuity (monthly pension). The 60% lumpsum withdrawal is completely tax-exempt. The monthly pension received from the annuity is taxable as 'income from other sources.'
What is the 80CCD(1B) additional deduction?
Section 80CCD(1B) allows an additional deduction of up to ₹50,000 per year for NPS Tier 1 contributions, over and above the ₹1.5 lakh limit under Section 80C. This means NPS investors can claim up to ₹2 lakh in deductions annually — ₹1.5 lakh under 80C (can include NPS) and ₹50,000 under 80CCD(1B). This is only available under the old tax regime.
What returns does NPS typically generate?
NPS returns depend on the asset allocation between Equity (E), Corporate Bonds (C), and Government Securities (G). Equity-heavy allocations (75% E, allowed until age 50) have historically returned 10–12% annually. Bond-heavy allocations return 7–9%. The calculator uses a blended return based on your chosen allocation. NPS returns are not guaranteed, unlike PPF or EPF.
Can I exit NPS before age 60?
Premature exit from NPS (before age 60 and after 3 years) is allowed with restrictions: you must buy an annuity with at least 80% of the corpus, and only 20% can be withdrawn as a lumpsum. Exit before 3 years of subscription is not permitted. In case of death, the entire corpus is paid to the nominee without mandatory annuitization.