NPS Calculator
Estimate your National Pension System corpus and expected monthly pension from regular contributions.
India-specific calculator. It uses Indian rules, rates and rupee amounts, and the currency selector is switched off on this page.
The NPS calculator projects the retirement corpus you could build through the National Pension System. On maturity you must use a minimum share (usually 40%) to buy an annuity that pays a monthly pension, while the remaining lump sum is paid out to you.
How to use the calculator
- Enter your monthly contribution to NPS (Tier-I).
- Set the expected annual return based on your asset allocation.
- Choose how many years are left until you turn 60.
- Pick the annuity share — 40% is the legal minimum.
How it is calculated
Where P = monthly contribution, i = monthly return (annual ÷ 12) and n = total months. Annuity = corpus × annuity share; the balance is the lump sum.
Worked example
₹5,000 per month for 30 years at 10%
Total contributions = ₹18,00,000
Estimated corpus ≈ ₹1,13,97,000; with a 40% annuity share that is about ₹45,59,000 for pension and a tax-free lump sum of around ₹68,38,000.
Who should use this calculator
- Salaried taxpayers under the old regime who have already used the ₹1.5 lakh 80C limit and want a further ₹50,000 deduction under 80CCD(1B).
- Young investors with a 25–30 year horizon who want a low-cost, market-linked retirement product instead of an insurance policy.
- Employees whose employer has no pension scheme and who need to build their own retirement income.
- Anyone comparing NPS with PPF or an equity mutual fund for the retirement portion of their portfolio.
Common mistakes to avoid
- Expecting the entire corpus as cash. At exit you must use at least 40% of the corpus to buy an annuity. Only the remaining part is paid out as a lump sum.
- Forgetting that pension income is taxable. The lump-sum portion is tax-free within the limits, but the monthly annuity you receive is taxed at your slab every year.
- Starting too late. NPS rewards long horizons. Beginning at 45 for a 60th-birthday target leaves only fifteen years for the corpus to build.
- Ignoring the charge structure and asset mix. NPS is one of the cheapest options available, but the allocation you choose — equity, corporate bonds or government securities — drives the outcome.
- Assuming equity-level returns on a conservative mix. A heavy government-securities allocation behaves very differently from an equity-heavy one, so match the assumption in the calculator to your actual allocation.
Two buckets: the corpus and the annuity
NPS behaves differently from most investment products because the money does not all arrive at once. On maturity you must annuitise a minimum share — usually 40% — with a PFRDA-registered provider, and that purchase converts the money into a monthly pension for life. The rest is paid to you as a lump sum.
Annuity rates are conservative, roughly 5–6% a year. A ₹40 lakh annuity at 6% works out to about ₹20,000 a month, which is why the lump-sum share matters so much for your retirement lifestyle. If you want a bigger lumpsum, increase the annuity share only when the monthly pension you are offered makes it worthwhile — the trade-off is yours to choose, and it should be decided close to retirement when rates are known.
NPS terms explained
- Tier-I account
- The main retirement account with the tax benefits and the lock-in until 60. Contributions here qualify for the deduction.
- Tier-II account
- A voluntary top-up account with no tax benefit and no lock-in, which can be withdrawn whenever you like.
- Annuity
- A contract where you hand over a lump sum and receive a guaranteed regular income in return, usually for life.
- Auto choice
- An option that automatically shifts your investments towards safer assets as you approach retirement.
- Section 80CCD(1B)
- The extra ₹50,000 deduction for NPS contributions, available over and above the ₹1.5 lakh 80C limit under the old regime.
Frequently asked questions
How much of the NPS corpus must I annuitise?
At exit, a minimum of 40% of the corpus must be used to purchase an annuity from a PFRDA-registered provider. The remaining 60% is paid as a lump sum, which is fully tax-free for contributions up to the prescribed limits.
Is NPS contribution eligible for tax deduction?
Yes. Under the old regime, NPS contributions qualify under section 80CCD(1) within the overall 80C limit, plus an additional ₹50,000 under section 80CCD(1B). Employer contributions up to 10% of basic may also be deductible.
Can I withdraw before 60?
Partial withdrawals are allowed after three years for specified reasons such as medical treatment, higher education or buying a house. Premature exit before 60 is permitted in limited cases, with at least 80% of the corpus to be annuitised.