NPS Calculator
Calculate NPS corpus at retirement with lumpsum, annuity split, and monthly pension. Free, privacy-first — inputs never leave your browser.
Details
Result
Corpus at Retirement
₹1,13,96,627
Lumpsum (tax-free)
₹68,37,976
Annuity Corpus
₹45,58,651
Monthly Pension
₹22,793
For estimation only. Not professional financial, tax, or legal advice. Consult a qualified advisor before making decisions. Full disclaimer.
What is the National Pension System?
The National Pension System (NPS) is a voluntary, market-linked retirement scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). It is open to all resident individuals aged 18-70 and to NRIs. Complete scheme details, fund performance, and charges are maintained at pfrda.org.in. NPS has two account types — Tier 1 (long-term, lock-in till 60) and Tier 2 (voluntary, no lock-in, not tax-advantaged).
Tier 1 vs Tier 2
- Tier 1 — primary retirement account. Lock-in till age 60. Tax deductions available. Equity capped at 75% (active choice) or 75% under LC75 auto choice.
- Tier 2 — optional investment account. No lock-in, withdraw anytime. No 80C/80CCD benefit (except for government employees with 3-year lock).
- Minimum contribution Tier 1: ₹500 per contribution, ₹1,000 per year.
- Asset classes: E (equity), C (corporate bonds), G (government securities), A (alternatives, max 5%).
How the NPS corpus and pension are calculated
Corpus at 60 = Σ monthly contributions compounded at weighted portfolio return
At age 60, at least 40% of the corpus must be used to purchase a lifetime annuity from a PFRDA-empanelled insurer. The remaining 60% is withdrawn as a tax-free lump sum under section 10(12A). Current annuity rates for 60-year-olds are approximately 6.5-7.5% depending on the option (return of purchase price / joint life / no-return).
Worked example — ₹10,000/month for 30 years
Contribution ₹10,000/month for 360 months; blended portfolio return 10% p.a. → corpus at 60 ≈₹2.28 crore. 60% lump sum = ₹1.37 crore (tax-free); 40% annuity purchase = ₹91.2 lakh at 7% annuity rate = ₹5.32 lakh/year pension (~₹44,300/month), taxable at slab rates. Pushing equity allocation to 75% can add 15-25% to the terminal corpus but widens the range of outcomes.
Tax context
- Section 80CCD(1): employee contribution up to 10% of salary within the overall ₹1.5L 80C cap (old regime).
- Section 80CCD(1B): additional ₹50,000 over and above 80C (old regime only).
- Section 80CCD(2): employer contribution up to 14% of basic deductible — available in both old and new regime. This is the most tax-efficient NPS route for salaried employees.
- Section 10(12A): 60% lump-sum withdrawal at 60 is tax-exempt.
- Annuity income: taxable at slab rates in the year of receipt.
Common mistakes
- Over-weighting NPS under the new regime. Only 80CCD(2) works in the new regime — 80CCD(1B) is disallowed.
- Ignoring the annuity requirement. 40% of your corpus will buy a fixed annuity whose real value erodes with inflation; plan for additional equity outside NPS.
- Auto-choice without review. LC50 caps equity at 50% — fine at 50, conservative at 30.
- Picking the cheapest annuity provider without features. "Return of purchase price" options pay lower rates but preserve capital for heirs.
- Premature exit. Before 60, you must annuitise 80% of corpus; only 20% is withdrawable.
Related calculators and reading
See also: APY Calculator, EPF Calculator, PPF Calculator, Retirement Calculator, glossary: Section 80C.
Common questions about NPS
What is NPS and who can invest?+
National Pension System is a voluntary retirement savings scheme regulated by PFRDA. Any Indian citizen aged 18-70 can open an NPS account (Tier 1 is mandatory; Tier 2 optional, liquid). Contributions are invested in a mix of equity (up to 75%), corporate debt, government bonds, and alternative assets. Withdrawable at 60 — minimum 40% must be annuitised for lifelong pension; up to 60% as lumpsum (tax-free).
What are NPS tax benefits?+
Three-fold under OLD regime: (1) ₹1.5L under 80C (part of combined 80C limit); (2) Additional ₹50,000 exclusive under 80CCD(1B) — NPS-only deduction; (3) Employer NPS contribution up to 10% of basic+DA under 80CCD(2), deductible beyond the ₹1.5L + ₹50k limits. Under NEW regime, only 80CCD(2) employer contribution is available (raised to 14% for govt employees). Total potential: ₹2L personal + employer 10%-14% of basic.
What return does NPS give?+
Historical CAGR (2009-2024): Equity (Scheme E): 11%-13%; Corporate debt (C): 8.5%-9%; Government bonds (G): 8%-9%; Alternatives (A): 9%-10%. Blended returns for a 50% equity allocation: ~10%-11%. Lower than direct equity mutual funds (~12%-13%) due to equity cap and Auto Choice de-risking, but significantly better than PPF/EPF for long-horizon wealth.
How is NPS maturity taxed?+
At retirement (age 60 or post-deferment): (a) Lumpsum up to 60% of corpus — fully tax-free; (b) Annuity (minimum 40%) is taxable — pension received annually is added to income and taxed at slab rate. Partial withdrawal (up to 25% of own contribution) for specific reasons — tax-free. Premature exit before 60: only 20% as lumpsum tax-free; 80% must go to annuity.
Should I choose Active or Auto Choice?+
Active Choice: you set allocation (up to 75% equity). Auto Choice: lifecycle model — Aggressive (75% equity till 35, taper to 15% by 55), Moderate (50% till 35, taper to 10%), Conservative (25% max equity). Auto de-risks automatically — good for passive investors. Active gives control for engaged investors willing to rebalance. Change scheme/fund manager twice a year free.
Which NPS fund manager is best?+
Returns are tightly clustered across managers (within 0.5%-1%). Top performers historically: HDFC Pension, ICICI Pru Pension, UTI Pension. Consider brand, consistent rankings, and low cost (PFRDA capped charges make all managers similarly cheap). You can switch fund manager once a year free via CRA portal (KFintech or Protean). Don't chase past returns; focus on asset allocation instead.