worldofcalcsNPS Calculator 👴
About NPS (National Pension System)
NPS is a voluntary, long-term retirement savings scheme designed to enable systematic savings. It is regulated by PFRDA.
Tax Benefits
- 80C: Up to ₹1.5 Lakh deduction.
- 80CCD(1B): Additional ₹50,000 deduction.
- Lump Sum: up to 60% of the corpus withdrawn at exit is tax-free.
Withdrawal Rules
- At normal exit: non-government subscribers can withdraw up to 80% as a lump sum, with at least 20% used to buy an annuity. Government employees keep the 60/40 split.
- Before 60: Only 20% can be withdrawn, 80% for annuity.
What is the National Pension System?
The National Pension System (NPS) is a voluntary, market-linked retirement scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). You contribute regularly while you work, and pension fund managers invest the money in the mix of equity, corporate bonds and government securities you choose. At retirement, part of the corpus can be withdrawn as a lump sum and the rest buys an annuity, an insurance product that pays you a monthly pension for life. Because returns depend on markets, NPS is not guaranteed like PPF, but its equity exposure gives it more growth potential over long periods.
How the NPS corpus and pension are calculated
P is your monthly contribution, r the expected monthly return (annual return ÷ 12 ÷ 100) and n the number of months until retirement. At retirement, the annuity share of the corpus is converted into a monthly pension: Pension = Corpus × Annuity % × Annuity rate ÷ 12. The calculator assumes a constant return; real NPS returns vary from year to year with the markets.
NPS exit rules (since December 2025)
- Non-government subscribers (All Citizen and corporate) with a corpus above ₹12 lakh at normal exit can withdraw up to 80% as a lump sum; at least 20% must buy an annuity. Normal exit means age 60, retirement, or 15 years in NPS.
- Corpus up to ₹8 lakh: the whole amount can be withdrawn.
- Corpus between ₹8 lakh and ₹12 lakh: up to ₹6 lakh as a lump sum, with the rest taken through an annuity or systematic withdrawals over at least six years.
- Government employees: at least 40% of the corpus still goes into an annuity at normal exit.
- You can stay invested and defer withdrawals up to age 85.
- Tax: under the old regime you can claim an extra ₹50,000 deduction for your own NPS contributions, on top of the ₹1.5 lakh limit. Employer contributions are deductible within limits under both regimes. Pension from the annuity is taxed at your slab rate.
- Rules change from time to time, so confirm your exit options on the NPS Trust or PFRDA website before you retire.
Worked example: ₹5,000 a month from age 25
- Contribute ₹5,000 a month from age 25 to 60 (420 months), expecting a 10% annual return
- Total contributed: ₹21,00,000
- Projected corpus at 60: ₹1,91,41,384
- Lump sum (80%): ₹1,53,13,107. Annuity purchase (20%): ₹38,28,277
- Monthly pension at a 6% annuity rate: ₹19,141
- With 40% in the annuity instead (the rule for government employees, or by choice), the pension doubles to ₹38,283 a month and the lump sum falls to ₹1,14,84,830
NPS corpus and pension by contribution and starting age
Projected values at retirement (age 60) at a 10% annual return, with 20% of the corpus buying an annuity at 6%.
| Monthly contribution | Starting age | Corpus at 60 | Lump sum (80%) | Monthly pension (20%) |
|---|---|---|---|---|
| ₹2,000 | 25 | ₹76,56,553 | ₹61,25,243 | ₹7,657 |
| ₹2,000 | 35 | ₹26,75,781 | ₹21,40,625 | ₹2,676 |
| ₹5,000 | 25 | ₹1,91,41,384 | ₹1,53,13,107 | ₹19,141 |
| ₹5,000 | 35 | ₹66,89,452 | ₹53,51,561 | ₹6,689 |
| ₹10,000 | 25 | ₹3,82,82,767 | ₹3,06,26,214 | ₹38,283 |
| ₹10,000 | 35 | ₹1,33,78,903 | ₹1,07,03,123 | ₹13,379 |
NPS returns are market-linked and not guaranteed. Annuity rates depend on the insurer and the plan you choose at retirement.