NPS Calculator

Age	Monthly	Invested in year	Returns	Corpus
31	₹10,000	₹1,20,000	₹27,645	₹3,47,645
32	₹10,500	₹1,26,000	₹43,441	₹5,17,086
33	₹11,025	₹1,32,300	₹61,536	₹7,10,922
34	₹11,576	₹1,38,915	₹82,202	₹9,32,039
35	₹12,155	₹1,45,861	₹1,05,744	₹11,83,644
36	₹12,763	₹1,53,154	₹1,32,498	₹14,69,295
37	₹13,401	₹1,60,811	₹1,62,837	₹17,92,944
38	₹14,071	₹1,68,852	₹1,97,176	₹21,58,972
39	₹14,775	₹1,77,295	₹2,35,976	₹25,72,242
40	₹15,513	₹1,86,159	₹2,79,746	₹30,38,147
Total		₹79,72,662	₹3,17,25,029	₹3,98,97,690

What is the National Pension System (NPS)?

The National Pension System is a government-regulated, market-linked retirement scheme run by PFRDA. You contribute regularly until 60; the money is invested by a pension fund manager in a mix of equity, corporate bonds and government securities that you choose. At 60, part of the corpus can be withdrawn as a lump sum and the rest buys an annuity that pays you a pension for life.

This NPS calculator estimates your corpus at retirement from your age, monthly contribution, yearly increase and expected return, then splits it into the lump sum and the annuity purchase and estimates your monthly pension.

How this calculator works

The National Pension System invests your monthly contribution across equity, corporate bonds and government securities. The balance compounds every month until you retire, and each year your contribution steps up by the percentage you set.

At maturity the rules split the corpus: at least 40% must be used to buy an annuity that pays you a pension for life, and the remaining 60% can be withdrawn as a tax-free lump sum. Your monthly pension is the annuity amount multiplied by the annuity rate, divided by twelve.

Because the annuity rate is usually lower than the return you earned while investing, putting more than the minimum into an annuity gives a bigger pension but a smaller lump sum. The slider lets you see that trade-off immediately.

Formula

Corpus       = Σ monthly contributions compounded at (return ÷ 12)
Annuity      = corpus × annuity %
Lump sum     = corpus − annuity
Monthly pension = (annuity × annuity rate) ÷ 12

Worked example

₹10,000 a month from age 30 to 60, stepped up 5% a year, at a 10% return, starting from ₹2,00,000.
The corpus grows past ₹3 crore because thirty years of monthly compounding does most of the work.
At 40% annuity and a 6% annuity rate, that is a lump sum of about ₹1.9 crore and a pension of roughly ₹65,000 a month.

Tier I and Tier II accounts

	Tier I	Tier II
Purpose	Retirement account	Optional savings account
Withdrawals	Restricted until 60	Anytime
Tax deduction	80CCD(1), 80CCD(1B), 80CCD(2)	Generally none
Minimum contribution	₹1,000 a year	None once opened
Needs Tier I?	—	Yes

Choosing your investment mix

Active choice: you set the split between equity (E), corporate bonds (C), government securities (G) and alternative assets (A, up to 5%). Equity is capped at 75% until age 50, and the cap then tapers each year.
Auto choice: a life-cycle fund moves money from equity to bonds as you age. Aggressive (LC75), moderate (LC50) and conservative (LC25) versions start with different equity levels.
You pick one of the registered pension fund managers and can change the manager and the mix a limited number of times a year.
For a long horizon, a higher equity share has historically produced higher returns, with more year-to-year swings.

NPS tax benefits

Section 80CCD(1): your contribution, up to 10% of salary (20% of income for the self-employed), within the overall ₹1.5 lakh 80C limit — old regime.
Section 80CCD(1B): an extra ₹50,000 over and above 80C — old regime only.
Section 80CCD(2): your employer’s contribution, up to 10% of basic + DA in the old regime and 14% in the new regime.
At 60, up to 60% of the corpus can be withdrawn tax-free; the annuity income is taxed as regular income.

Assumptions & important notes

What this calculator assumes

Returns are constant every year. Real NPS returns vary with markets and with your asset allocation choice.
Contributions are made at the start of each month and never skipped.
The annuity rate available at retirement equals the rate you entered. Actual rates depend on the annuity plan, your age and the provider at that time.
No partial withdrawals are made during the accumulation period.

Important notes

Contributions qualify for deduction up to ₹1.5 lakh under 80CCD(1) within the 80C ceiling, plus an extra ₹50,000 under 80CCD(1B) — both only in the old regime.
Employer contributions under 80CCD(2) are deductible in both regimes: up to 14% of Basic + DA in the new regime.
The 60% lump sum is tax-free. Pension received from the annuity is taxed as income in the year you receive it.
Estimates only — NPS returns are market-linked and not guaranteed.

Frequently asked questions

How much of the NPS corpus can I withdraw at 60?

Up to 60% as a tax-free lump sum. The balance must buy an annuity. If the total corpus is ₹5 lakh or less, the entire amount can be withdrawn.

What return should I assume?

It depends on your asset mix. Equity-heavy allocations have historically delivered around 10–12% over long periods, government-security-heavy ones closer to 7–9%. Use a conservative figure and treat the result as a range, not a promise.

Is the pension taxable?

Yes. The annuity pension is added to your income and taxed at your slab rate in the year you receive it. The lump-sum withdrawal at retirement is exempt.

Can I retire before 60?

Early exit is allowed after three years, but then at least 80% of the corpus must go into an annuity and only 20% can be withdrawn — the reverse of the rule at 60.

Is NPS better than a mutual fund SIP?

NPS has very low costs and extra tax deductions, but locks money until 60 and requires part of the corpus to buy an annuity. Mutual funds are flexible and fully withdrawable. Many people use NPS for its tax benefit and mutual funds for flexibility.

What annuity rate should I assume?

Annuity rates depend on interest rates when you retire and the annuity option you choose. 5.5%–7% a year is a reasonable planning range; options that return the purchase price to your nominee pay less.

Lump sum (tax-free)	₹2.39 Cr	60.0%
Annuity purchase	₹1.60 Cr	40.0%

Year-wise projection

About the NPS Calculator