NPS Calculator

Estimate your National Pension System corpus at retirement, monthly pension, and lump sum withdrawal amount.

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Pension Estimate at Retirement

Lump Sum Withdrawal (60%) ₹0
Investment in Annuity (40%) ₹0
Est. Monthly Pension ₹0

Frequently Asked Questions About NPS

What is NPS (National Pension System)?

NPS (National Pension System) is a government-sponsored pension scheme in India launched in 2004 and regulated by PFRDA. It allows individuals to contribute regularly during their working years to build a retirement corpus. NPS invests in a mix of equity, corporate bonds, and government securities through professional fund managers.

At retirement (age 60), you must use at least 40% of the corpus to buy an annuity (which provides a regular monthly pension), and you can withdraw up to 60% as a tax-free lump sum. NPS is available to all Indian citizens between the ages of 18 and 70.

What are the tax benefits of investing in NPS?

NPS offers substantial tax benefits under multiple sections of the Income Tax Act:

  • Section 80CCD(1): Contributions up to 10% of salary (for salaried) or 20% of gross income (for self-employed) are deductible, within the overall Rs 1.5 lakh limit of Section 80C.
  • Section 80CCD(1B): An additional exclusive deduction of Rs 50,000 for NPS contributions, over and above the 80C limit. This means you can claim up to Rs 2 lakh total deduction.
  • Section 80CCD(2): Employer contributions up to 10% of salary (basic + DA) are deductible with no upper cap, and this is over and above Section 80C.

At maturity, the 60% lump sum withdrawal is completely tax-free. The annuity income (monthly pension) is taxable as per your income tax slab.

How is NPS different from PPF?

Here are the key differences between NPS and PPF:

  • Returns: NPS offers market-linked returns (historically 8–12% p.a.) while PPF offers a fixed rate set by the government (currently around 7.1% p.a.).
  • Lock-in: NPS is locked until age 60 (with limited partial withdrawal after 3 years), while PPF has a 15-year lock-in with extension options.
  • Withdrawal: At NPS maturity, 60% can be withdrawn as lump sum and 40% must purchase an annuity. PPF allows full withdrawal at maturity.
  • Tax: Both offer Section 80C deductions. NPS provides an additional Rs 50,000 deduction under 80CCD(1B). PPF interest and maturity are fully tax-free (EEE status).
  • Risk: NPS has market risk due to equity exposure. PPF is risk-free with government-guaranteed returns.

For long-term retirement planning with higher return potential, NPS is often preferred. For risk-free assured returns, PPF is a better choice.