NPS Calculator
National Pension System Calculator. Plan your retirement with market-linked pension schemes.
Retirement age is fixed at 60 years in NPS.
Minimum 40% must be used to purchase an annuity.
Typical annuity returns are between 5% to 7%.
Expected Monthly Pension
₹22,793
*Pension received every month starting at age 60.
Total Invested
₹18,00,000
Total Corpus Generated
₹1,13,96,627
Annuity Corpus (Used for pension)
₹45,58,651
Tax-Free Lumpsum Withdrawal
₹68,37,976
How the NPS Calculator works
Reviewed by Dinesh Babu · Last updated July 2026
The National Pension System (NPS) is a market-linked retirement scheme regulated by PFRDA. Your money is invested across equity, corporate bonds and government bonds according to a mix you choose, so returns are NOT guaranteed — they depend on the market. This calculator estimates your corpus at 60, the lump sum you can take, and the pension your annuity might pay, all based on an assumed return you enter.
A Tier-I NPS account is locked until age 60. Its standout feature is tax: beyond the ₹1.5 lakh Section 80C limit, NPS gives an EXTRA ₹50,000 deduction under Section 80CCD(1B), so a taxpayer can claim up to ₹2 lakh in total. This exclusive top-up is why many people open NPS purely for the additional tax break.
At 60 you can withdraw up to 60% of the corpus as a tax-free lump sum. The remaining minimum 40% must be used to buy an annuity (a pension product) from an insurer. That annuity pays you a regular pension for life — but the pension income is taxable at your slab in the years you receive it.
NPS corpus and split at 60
Corpus grows at your assumed return; at 60: up to 60% tax-free lump sum, ≥40% buys an annuity
Returns are market-linked and not guaranteed. Annuity income is taxable as income when received.
Why returns are an assumption, not a promise
Unlike PPF or EPF, NPS has no fixed rate. Its value rises and falls with equity and bond markets. Any figure this calculator shows is a projection based on the return you assume — commonly modelled around 8–10% for a long horizon, but your actual outcome could be higher or lower. Treat the numbers as a planning estimate, not a guarantee, and consider professional advice for large decisions.
The annuity is the catch worth understanding
- At least 40% of your corpus must buy an annuity — you cannot take the whole amount as cash.
- The annuity pays a lifelong pension, but that pension is fully taxable as income each year.
- Annuity rates (often around 5–7%) are modest, so the pension may feel small relative to the corpus.
- If the total corpus is ₹5 lakh or less at 60, you may withdraw all of it without buying an annuity.
| Feature | NPS | PPF | EPF |
|---|---|---|---|
| Return type | Market-linked, not guaranteed | 7.1% fixed | 8.25% fixed |
| Extra tax break | ₹50,000 under 80CCD(1B) | None beyond 80C | None beyond 80C |
| Lock-in | Until age 60 | 15 years | Until retirement |
| At exit | 60% cash + 40% annuity | Full tax-free lump sum | Full tax-free lump sum |
| Pension income taxed? | Yes (annuity is taxable) | N/A | EPS pension taxable |
The 80CCD(1B) tax saving
If you are in the 30% tax bracket and invest ₹50,000 in NPS under Section 80CCD(1B), you save ₹15,000 in tax (plus cess) that year — on top of whatever you already save through the ₹1.5 lakh 80C limit.
Corpus split at retirement
Suppose your NPS corpus at 60 is ₹1 crore (assuming, say, 9% average returns — not guaranteed). You could withdraw up to ₹60 lakh tax-free and must use at least ₹40 lakh to buy an annuity. At an illustrative 6% annuity rate, ₹40 lakh would pay roughly ₹20,000 a month as pension, which is taxable.
Common mistakes to avoid
- Assuming NPS returns are guaranteed — they are market-linked and can fall.
- Forgetting that the mandatory annuity pension is taxable as income each year.
- Overlooking the ₹50,000 80CCD(1B) deduction, which is over and above the ₹1.5 lakh 80C limit.
- Choosing an aggressive equity mix close to retirement, leaving the corpus exposed to a market fall right before you exit.
Frequently asked questions
What tax benefit does NPS give?+
Beyond the ₹1.5 lakh Section 80C limit, NPS offers an additional ₹50,000 deduction under Section 80CCD(1B), so you can claim up to ₹2 lakh in total. This extra ₹50,000 is exclusive to NPS and is the main reason many people invest in it.
Are NPS returns guaranteed?+
No. NPS invests in equity and bonds, so returns are market-linked and not guaranteed. Any projection here is based on the return rate you assume — commonly 8–10% for long horizons, but actual returns will vary with the market.
When can I withdraw from NPS?+
A Tier-I account is normally locked until age 60. At 60 you can take up to 60% of the corpus tax-free, and at least 40% must be used to buy an annuity that provides a lifelong pension.
Is the NPS lump sum and pension taxable?+
The up-to-60% lump sum withdrawn at 60 is tax-free. However, the pension you receive from the mandatory annuity is fully taxable as income at your slab in the years you receive it.
What is an annuity in NPS?+
An annuity is a pension product bought from a life insurer using at least 40% of your corpus. It pays you a fixed regular income for life. The annuity rate (often 5–7%) determines your monthly pension, and that pension is taxable.
What is the difference between Tier-I and Tier-II NPS?+
Tier-I is the main retirement account with the tax benefits and lock-in until 60. Tier-II is a voluntary, flexible account with no lock-in and no extra tax deduction for most people — more like an investment wallet than a pension.
Can I take the entire NPS corpus as cash at 60?+
Only if the total corpus is ₹5 lakh or less, in which case you can withdraw it all without buying an annuity. Above that, the 40% annuity requirement applies.
Is NPS better than PPF or EPF?+
It is different, not strictly better. NPS can earn more over long periods because of equity exposure, and gives an extra ₹50,000 tax deduction, but its returns are not guaranteed and part of the corpus is locked into a taxable annuity. PPF and EPF give fixed, fully tax-free returns. Many investors use a combination.