NPS Calculator
Calculate pension corpus and monthly pension from National Pension System
NPS Investment Details
Minimum: ₹1,000 per month
For corporate sector employees
Historical NPS returns: 8-12% based on asset allocation
Current annuity rates: 5.5-7% depending on age
NPS Key Features
- • Market-linked returns
- • Low cost (0.01-0.25% expense ratio)
- • Tax benefits under 80CCD
- • Portable across jobs
- • Partial withdrawal allowed
- • Regulated by PFRDA
Enter your NPS investment details to calculate pension benefits
NPS Asset Allocation Options
Auto Choice (Life Cycle Fund)
Active Choice
Tax Benefits & Rules
NPS Withdrawal Rules
At Maturity (60+ years)
- • 40% lump sum withdrawal (tax-free)
- • 60% must purchase annuity
- • Can defer withdrawal till 75 years
Partial Withdrawal
- • After 3 years of contribution
- • Max 25% of contribution
- • For specific purposes only
- • Limited to 3 times during tenure
Premature Exit
- • Allowed after 10 years
- • 20% lump sum withdrawal
- • 80% must purchase annuity
- • Tax on lump sum amount
NPS vs Other Retirement Options
| Feature | NPS | PPF | EPF |
|---|---|---|---|
| Lock-in Period | Till 60 years | 15 years | Till retirement |
| Expected Returns | 8-12% | 7.1% | 8.15% |
| Tax on Maturity | Partial | Tax-free | Tax-free |
| Maximum Limit | No limit | ₹1.5L/year | Salary linked |
| Flexibility | High | Medium | Low |
Complete Guide to National Pension Scheme (NPS) Calculator 2024
What is National Pension Scheme (NPS)?
National Pension Scheme (NPS) is a government-sponsored voluntary retirement savings scheme launched in 2004 for government employees and extended to all Indian citizens in 2009. Regulated by Pension Fund Regulatory and Development Authority (PFRDA), NPS helps build a retirement corpus through systematic monthly contributions invested in equity, corporate bonds, and government securities. Key features: Low-cost (fund management fee 0.01%), flexible asset allocation (25-75% equity based on age), portable across jobs, market-linked returns averaging 9-12% annually, and substantial tax benefits under Sections 80CCD(1), 80CCD(1B), and 80CCD(2).
NPS Tax Benefits: Save Up to ₹2 Lakh Annually
Section 80CCD(1) - Employee Contribution
- • Deduction Limit: Up to ₹1.5 lakh per year (within overall 80C limit)
- • Eligibility: Self-employed and salaried (own contribution)
- • Calculation: Lower of 10% of salary (20% for self-employed) or ₹1.5 lakh
- • Example: Salary ₹10 lakh → Max deduction ₹1 lakh (10%), but combined with PPF, ELSS, etc. limited to ₹1.5L
Section 80CCD(1B) - Additional Deduction
- • Deduction Limit: Extra ₹50,000 per year (over and above 80C limit)
- • Key Advantage: Exclusive to NPS - not available for PPF, ELSS, or tax-saving FDs
- • Total Benefit: ₹1.5 lakh (80C) + ₹50,000 (80CCD1B) = ₹2 lakh deduction
- • Tax Saving: 30% tax slab saves ₹15,000 additional tax on this ₹50K (₹46,800 with cess)
Section 80CCD(2) - Employer Contribution
- • Deduction Limit: Up to 10% of salary (14% for central government employees)
- • Key Advantage: Over and above ₹1.5 lakh (80C) and ₹50,000 (80CCD1B) limits
- • Eligibility: Only salaried employees (not self-employed)
- • Example: Salary ₹12 lakh, employer contributes ₹1.2 lakh (10%) → Full deduction beyond other limits
- • Total Tax Saving: Can exceed ₹2.5 lakh deduction with all three sections combined
Maximum Tax Saving Example (Salaried Employee)
| 80CCD(1) - Own contribution | ₹1,50,000 |
| 80CCD(1B) - Additional NPS | ₹50,000 |
| 80CCD(2) - Employer contribution (10% of ₹15L) | ₹1,50,000 |
| Total Deduction | ₹3,50,000 |
| Tax Saved @ 30% slab (with cess) | ₹1,09,200 |
NPS Tier I vs Tier II Accounts: Key Differences
| Feature | Tier I (Mandatory) | Tier II (Voluntary) |
|---|---|---|
| Account Type | Pension account (compulsory for NPS) | Savings account (optional add-on) |
| Lock-in Period | Until age 60 (partial withdrawal allowed) | No lock-in - withdraw anytime |
| Minimum Contribution | ₹500/month, ₹1,000/year to keep active | ₹250/month, no annual minimum |
| Tax Benefit | Yes - 80CCD(1), 80CCD(1B), 80CCD(2) | Limited - ₹1.5L deduction for Govt employees only (80C) |
| Withdrawal | Restricted: 25% lump sum, 40% phased, 35% annuity mandatory | Unrestricted - full amount anytime |
| Fund Management | Choose from 8 PFs (SBI, HDFC, ICICI, etc.) | Same fund managers as Tier I |
| Asset Allocation | Auto/Active choice - equity (E), corporate bonds (C), govt securities (G) | Same as Tier I |
| Best For | Long-term retirement planning with tax benefits | Short-term goals, emergency fund with equity exposure |
Note: Tier II can be opened only if you have an active Tier I account. While Tier II offers liquidity, it lacks the substantial tax benefits that make Tier I attractive. For maximum retirement corpus, focus on maximizing Tier I contributions first (₹2 lakh deduction via 80CCD).
NPS Asset Allocation Strategy by Age
NPS offers two investment choices:
Auto Choice (Life Cycle Fund)
Equity allocation automatically reduces as you age. Three options:
| Age | Aggressive (A) | Moderate (M) | Conservative (C) |
|---|---|---|---|
| 25-35 years | 75% E | 50% E | 25% E |
| 36-45 years | 65% E | 40% E | 20% E |
| 46-55 years | 45% E | 25% E | 15% E |
| 56-60 years | 25% E | 15% E | 10% E |
E = Equity (stocks), C = Corporate bonds, G = Government securities. Remaining allocation split between C and G.
Active Choice (Self-Allocation)
You decide allocation across three asset classes:
- • Equity (E): 0-75% - High returns (12-14%), high volatility. Best for age < 40.
- • Corporate Bonds (C): 0-100% - Moderate returns (7-9%), medium risk. Good for age 40-55.
- • Government Securities (G): 0-100% - Safe returns (6-7%), low risk. Increase after age 55.
Recommended Allocation by Age:
Age 25-35: 75%E, 15%C, 10%G | Age 36-45: 60%E, 25%C, 15%G | Age 46-55: 40%E, 35%C, 25%G | Age 56-60: 20%E, 40%C, 40%G
Strategy Tip: Start aggressive (75% equity) when young for higher returns. Rebalance to conservative (25% equity) after age 50 to protect corpus near retirement. You can switch between auto/active and change allocation once per year.
How to Build ₹1 Crore NPS Corpus - Real Examples
Example 1: Start Early at Age 25
- Age: 25 years
- Monthly Investment: ₹5,000
- Expected Return: 10% annually
- Retirement Age: 60 years
- Investment Period: 35 years
- Total Contribution: ₹21,00,000
- Maturity Corpus: ₹1,88,69,000
- Interest Earned: ₹1,67,69,000 (8x your money!)
- Monthly Pension @ 6% annuity: ₹59,629/month
Example 2: Start at Age 35
- Age: 35 years
- Monthly Investment: ₹10,000
- Expected Return: 10% annually
- Retirement Age: 60 years
- Investment Period: 25 years
- Total Contribution: ₹30,00,000
- Maturity Corpus: ₹1,32,83,000
- Interest Earned: ₹1,02,83,000 (4.4x your money)
- Monthly Pension @ 6% annuity: ₹41,959/month
Example 3: Aggressive Late Start Age 45
- Age: 45 years
- Monthly Investment: ₹20,000
- Expected Return: 10% annually
- Retirement Age: 60 years
- Investment Period: 15 years
- Total Contribution: ₹36,00,000
- Maturity Corpus: ₹82,89,000
- Interest Earned: ₹46,89,000 (2.3x your money)
- Monthly Pension @ 6% annuity: ₹26,181/month
Example 4: With Employer Contribution
- Age: 30 years, Salary ₹10 lakh/year
- Your Contribution: ₹6,250/month (7.5%)
- Employer Contribution: ₹8,333/month (10%)
- Total Monthly: ₹14,583
- Expected Return: 10% annually
- Investment Period: 30 years
- Total Contribution: ₹52,50,000
- Maturity Corpus: ₹3,31,89,000
- Interest Earned: ₹2,79,39,000 (6.3x return!)
- Monthly Pension @ 6% annuity: ₹1,04,847/month
Key Takeaway:
Starting 10 years earlier (25 vs 35) with half the monthly amount (₹5K vs ₹10K) gives you 42% higher corpus (₹1.88 Cr vs ₹1.33 Cr). Start early, even with small amounts! Employer contribution effectively doubles your retirement corpus.
NPS Withdrawal Rules & Exit Strategy
At Retirement (Age 60-70)
Option 1: Normal Exit at 60 (Mandatory Split)
- • 40% Lump Sum: Tax-free withdrawal (e.g., ₹1 Cr corpus → ₹40L tax-free)
- • 40% Annuity Purchase: Mandatory to buy pension plan from PFRDA-approved insurers
- • 20% Optional: Either lump sum (taxable) or additional annuity
- • Monthly Pension: Based on annuity purchased (typically 6-7% annual payout rate)
Option 2: Defer Exit (60-75 years)
- • Continue investing and let corpus grow
- • Mandatory annuity reduces to 35% if exit after 70 (65% lump sum possible)
- • Maximum deferral age: 75 years
Partial Withdrawal Before Retirement (Age 60)
- • When: After 3 years of account opening, maximum 3 times during NPS tenure
- • Amount: Up to 25% of your own contribution (not employer's)
- • Allowed For: Children's higher education, marriage; treatment of critical illness; building/buying house
- • Tax: Taxable as per your income tax slab
- • Gap: Minimum 5 years between two withdrawals
- • Example: Contributed ₹10L over 5 years → Can withdraw ₹2.5L for house down payment
Premature Exit (Before Age 60)
- • After 10 years: 80% must be used to buy annuity, only 20% lump sum withdrawal allowed
- • Before 10 years: Only allowed for critical reasons - 80% annuity, 20% lump sum
- • Death: 100% corpus to nominee (no annuity requirement); nominee can continue or withdraw
- • NRI: Can close NPS when leaving India - normal exit rules apply
- • Recommendation: Avoid premature exit - 80% annuity rule significantly reduces lump sum benefit
Annuity Providers (PFRDA-Approved): LIC, SBI Life, HDFC Life, ICICI Prudential, Star Union Dai-ichi Life, Max Life, Kotak Mahindra Life. Compare annuity rates before purchase - difference of 0.5% can mean ₹5,000 extra monthly pension on ₹1 Cr corpus.
Frequently Asked Questions About NPS
Can I increase my NPS contribution mid-year?
Yes, you can increase NPS contributions anytime through your NPS account. For salaried employees with employer NPS deduction, inform HR to revise deduction amount. For individual accounts, simply deposit higher amount online or at PoP (Point of Presence). You can deposit any amount above minimum (₹500/month Tier I, ₹250/month Tier II) without upper limit. However, tax benefit capped at: ₹1.5L under 80CCD(1), extra ₹50K under 80CCD(1B), and employer contribution 10% of salary under 80CCD(2). Increase in December to maximize 80CCD(1B) benefit before financial year end.
What happens to my NPS if I change jobs?
NPS is portable - no action needed when changing jobs. Your PRAN (Permanent Retirement Account Number) remains same throughout life regardless of employer changes. If new employer offers NPS: Provide PRAN to HR, they will start contributing to same account, employer contribution (80CCD(2)) benefit continues. If new employer doesn't offer NPS: Continue as individual subscriber, lose 80CCD(2) benefit but can still contribute and claim 80CCD(1) and 80CCD(1B), convert corporate NPS to All Citizen Model. Update KYC details (new address, employer) on eNPS portal or through PoP. No penalty or charges for job change.
Is NPS better than PPF for retirement planning?
NPS offers higher potential returns (9-12% with equity exposure) vs PPF fixed 7.1% but comes with market risk. NPS tax benefit: ₹2 lakh (80CCD(1) + 1B) + employer contribution vs PPF ₹1.5L (80C only). NPS lock-in until 60 with 40% annuity mandatory vs PPF 15-year lock-in, full withdrawal tax-free. PPF returns fully tax-exempt (EEE) vs NPS 60% tax-free, pension taxable. Best strategy: Use both - PPF for guaranteed safe returns (₹1.5L annually), NPS for higher growth (₹50K in 80CCD(1B)). PPF good for age 50+ (safety), NPS better for age 25-45 (growth). Consider 60:40 split (₹90K PPF + ₹60K NPS) for balanced approach.
Can I withdraw NPS for medical emergency?
Yes, NPS allows partial withdrawal for critical illness treatment after 3 years. Maximum 25% of your own contribution can be withdrawn (not employer's contribution). Allowed only 3 times during NPS tenure with 5-year gap between withdrawals. Covered illnesses typically include: cancer, organ transplant, stroke, kidney failure, heart surgery (check PFRDA guidelines for full list). Process: Submit withdrawal request on eNPS portal, upload medical documents/certificates, approval in 7-10 days, amount credited to registered bank. Amount is taxable as per your income tax slab. For Tier II account: no restrictions, withdraw full amount anytime for any reason. Keep Tier II as emergency fund while Tier I for retirement.
How do I choose the best pension fund manager in NPS?
Compare 3-year and 5-year returns of equity (E), corporate bond (C), and government securities (G) schemes across 8 pension fund managers: SBI, HDFC, ICICI, Kotak, Aditya Birla, LIC, UTI, Max Life. Check performance on npstrust.org.in under "Performance Update" section. Top performers (2023-24): Equity (E) - SBI (14.2%), HDFC (13.8%); Corporate Bonds (C) - ICICI (8.1%), Aditya Birla (7.9%). You can switch fund manager once per year (free) or change scheme allocation (auto/active). Most investors choose SBI or HDFC for track record. If employer has default fund, you can change it. Don't chase past returns - consistency matters more. Check AUM (assets under management) - higher is better (SBI ₹3.2L Cr, HDFC ₹1.8L Cr).
What is the minimum pension I will get from NPS?
No guaranteed minimum pension in NPS as it depends on: corpus accumulated, annuity rate at retirement (6-8% currently), portion used for annuity purchase (40-80%). Example calculations: ₹25L corpus with 40% annuity (₹10L) @ 6% rate = ₹5,000/month pension. ₹50L corpus with 40% annuity (₹20L) @ 6.5% = ₹10,833/month. ₹1 Cr corpus with 40% annuity (₹40L) @ 7% = ₹23,333/month. To get ₹50,000/month pension: Need ~₹85L annuity @ 7% rate = ₹2.1 Cr total corpus with 40% annuity. Higher annuity purchase increases pension but reduces lump sum. Annuity rates decrease over time (7.5% in 2010, now 6-7%) due to lower interest rates. Start early and invest more to build larger corpus.
Can NRI or OCI invest in NPS?
Yes, NRIs (Non-Resident Indians) and OCIs (Overseas Citizens of India) aged 18-65 can open NPS account. Requirements: Valid PRAN can be obtained online or through PoP, KYC documents (passport, OCI card, overseas address proof), NRE/NRO bank account for contributions (not foreign account). Contributions in Indian Rupees only (convert from foreign currency). Same tax benefits as residents: 80CCD(1), 80CCD(1B) if paying tax in India. On return to India: Continue same NPS account, change address and bank details, no need to close and reopen. On permanent emigration: Can close NPS (normal exit rules - 80% annuity if before 10 years), or continue until age 60, keep Tier I dormant, actively use Tier II. NPS corpus repatriable outside India after exit as per RBI regulations.
What happens if I miss NPS contribution for some months?
Missing monthly contributions doesn't close your NPS account. Tier I: Account becomes "dormant" if total annual contribution less than ₹1,000 (penalty ₹100). Account remains active if you contributed ₹1,000+ in current financial year. Reactivate dormant account: Pay ₹100 penalty + pending contribution. Tier II: No penalty, no minimum contribution requirement. For salaried employees: If employer stops deduction, account continues as individual subscriber, you can contribute directly online. To resume: Login to eNPS portal, deposit via net banking, NEFT, or UPI, contribution accepted anytime during financial year. No impact on returns or corpus - only penalty if annual minimum not met. Set up auto-debit (eNACH) to avoid missing contributions. Even ₹500/month keeps account active (₹6,000 annually).
Is NPS pension taxable after retirement?
Yes, pension received from annuity is fully taxable as "Income from Other Sources" at your income tax slab rate. However, lump sum withdrawal (40-60%) at retirement is tax-free. Tax breakdown at exit: 40% lump sum - completely tax-free (exempt under section 10(12A)), 40% annuity purchase - not taxed now, but monthly pension taxable later, remaining 20% - if taken as lump sum, fully taxable; if used for annuity, pension taxable. Example: ₹1 Cr corpus: ₹40L lump sum (tax-free) + ₹40L annuity (₹23K/month pension, taxable) + ₹20L (your choice). If you have no other income after retirement and pension is only income: First ₹2.5L/year (₹20,833/month) is tax-free under basic exemption, next ₹2.5L taxed at 5% (₹12,500 tax), senior citizen exemption ₹3L instead of ₹2.5L.
Can I have multiple NPS accounts?
No, one person can have only ONE PRAN (Permanent Retirement Account Number) under NPS. PRAN is unique and linked to your PAN/Aadhaar. You can have: Tier I account (mandatory, one per person), Tier II account (optional, linked to same PRAN). If you accidentally opened multiple PRANs: Use eNPS portal to merge accounts, keep the older PRAN active, close duplicate PRAN, corpus from duplicate transferred to primary. If you have corporate NPS from employer + individual NPS: Both should be on SAME PRAN, inform employer to contribute to existing PRAN, if separate PRANs, get them merged immediately. Multiple accounts lead to: duplicate KYC, difficulty tracking corpus, exit complications. Always provide existing PRAN to new employer. Check PRAN status on npscra.nsdl.co.in with PAN/Aadhaar.