NPS Calculator

The National Pension System (NPS) is a market-linked retirement account regulated by PFRDA, where your monthly contributions are invested across equity and debt until you turn 60. This NPS calculator shows the corpus you will accumulate, how much you can take as a tax-free lump sum, and the monthly pension the mandatory annuity will pay you for life.

NPS works differently from a provident fund because the exit is split in two. At least 40% of the corpus must be used to buy an annuity that pays your pension; the remaining 60% can be withdrawn tax-free. Adjust the annuity share and annuity rate above to see the trade-off between a bigger lump sum today and a larger pension every month.

How is the NPS corpus and pension calculated?

The accumulation phase is a monthly SIP: each contribution is invested at the start of the month and compounds at your expected return divided by 12, so FV = P × [((1+i)ⁿ − 1) ÷ i] × (1+i), where i is the monthly return and n the number of months. At exit, annuity corpus = corpus × annuity share, lump sum = corpus − annuity corpus, and monthly pension = annuity corpus × annuity rate ÷ 12.

For example, ₹5,000 a month from age 30 to 60 at a 10% expected return: 360 monthly contributions total ₹18,00,000, and this calculator returns a corpus of ₹1,13,96,627 — a gain of ₹95,96,627 purely from compounding. Buying an annuity with the minimum 40% share puts ₹45,58,651 into the annuity and leaves ₹68,37,976 as a tax-free lump sum. At a 6% annuity rate, the pension works out to ₹45,58,651 × 6% ÷ 12 = ₹22,793 a month for life.

How to use this calculator

• Enter the amount you contribute to your NPS Tier-I account each month.
• Set your current age and retirement age — NPS matures at 60, but you can defer withdrawal up to 75.
• Choose an expected return based on your asset mix: 8–9% for a debt-heavy allocation, 10–12% if you hold a high equity share under the Active or Aggressive Life Cycle choice.
• Move the annuity share above 40% only if you want a larger monthly pension and a smaller lump sum.
• Set the annuity rate to what insurers are currently quoting — 6% is a reasonable planning assumption for a lifetime annuity.
• Open the year-by-year table to see when compounding starts to outpace your contributions; for most people that crossover happens around year 12 to 15.

NPS tax benefits and rules in India

NPS carries the most generous tax deductions available to Indian savers. Under the old regime, contributions qualify under Section 80CCD(1) within the ₹1.5 lakh 80C limit, plus an exclusive additional ₹50,000 under Section 80CCD(1B) that no other instrument offers. Salaried employees also get a deduction on the employer's contribution under Section 80CCD(2) — up to 14% of Basic + DA — and this one survives in the new tax regime too, making NPS one of the few genuinely useful deductions left for new-regime taxpayers.

The main trade-off is liquidity and the annuity requirement. Money in Tier-I is locked till 60, with partial withdrawals of up to 25% of your own contributions allowed only after three years and only for specified needs such as higher education, marriage, a house or serious illness. At exit, the 60% lump sum is tax-free, but the pension paid by the annuity is taxable at your slab rate as income. If your corpus is ₹5 lakh or less at 60, you may withdraw the entire amount without buying an annuity at all.

Frequently asked questions