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NPS Calculator

Estimate your National Pension System corpus at age 60 and find out how much you can withdraw as lumpsum — free, instant, no signup required.

NPS Corpus Calculator
Total Corpus at Age 60
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Total Invested
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Total Returns
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Lumpsum Withdrawal (60%)
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Annuity Investment (40%)
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What is NPS (National Pension System)?

The National Pension System (NPS) is a voluntary, long-term retirement savings scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and backed by the Government of India. It was originally launched for government employees in 2004 and extended to all Indian citizens in 2009. NPS allows you to build a retirement corpus through regular contributions invested across asset classes like equity, corporate bonds, and government securities.

NPS is particularly attractive because of its market-linked returns (higher than fixed-income products), significant tax benefits, low fund management charges, and a transparent, portable structure that follows you across employers and cities.

NPS Tier I and Tier II Accounts

Tier I is the primary NPS account with a mandatory lock-in until age 60. It is the account that qualifies for all NPS tax benefits. Contributions to Tier I cannot be freely withdrawn before maturity — only limited partial withdrawals are allowed under specific conditions.

Tier II is a voluntary savings account linked to your NPS Tier I account. It has no lock-in and allows free withdrawals at any time. However, Tier II contributions do not attract Section 80C benefits for non-government employees. Government employees with Tier II contributions do get a deduction under Section 80C, subject to a 3-year lock-in.

NPS Calculation Formula

The NPS corpus is calculated using the standard SIP (Systematic Investment Plan) future value formula, as your monthly contributions grow with compound interest over time:

FV = P × [((1 + r)^n − 1) / r] × (1 + r)

Where:
  P = Monthly contribution (₹)
  r = Monthly rate of return = Annual rate / 12 / 100
  n = Total months = (60 − Current Age) × 12
  FV = Total corpus at age 60

At maturity:
  Lumpsum (tax-free) = FV × 60%
  Annuity investment = FV × 40%

NPS Tax Benefits — Section 80CCD

NPS offers some of the most generous tax deductions available for Indian taxpayers:

  • Section 80CCD(1): Deduction for employee's own NPS contribution — up to 10% of salary (basic + DA) for salaried, or 20% of gross income for self-employed, within the overall ₹1.5 lakh Section 80C limit.
  • Section 80CCD(1B): An additional deduction of up to ₹50,000 per year exclusively for NPS contributions, over and above the ₹1.5 lakh Section 80C limit. This is unique to NPS and effectively allows a total deduction of ₹2 lakh per year.
  • Section 80CCD(2): Employer's contribution to NPS — up to 10% of salary (basic + DA) for private sector and up to 14% for central government employees — is fully deductible without any cap. This deduction is available even under the new tax regime.

NPS Asset Allocation Options

NPS allows you to choose how your contributions are invested across four asset classes:

  • Asset Class E (Equity): Invests in equity and equity-related instruments. Historically, this has delivered the highest returns but with higher volatility. Maximum allocation is 75% for subscribers under 50.
  • Asset Class C (Corporate Bonds): Invests in fixed income instruments of corporate entities. Lower risk than equity with moderate returns.
  • Asset Class G (Government Securities): Invests in central and state government securities. Lowest risk category.
  • Asset Class A (Alternative Investments): Invests in REITs, InvITs, and other alternative instruments. Limited to 5% maximum allocation.

You can manage allocation through Active Choice (set your own percentages) or Auto Choice (automatically rebalances based on age, reducing equity as you approach 60).

NPS Withdrawal Rules at Maturity

When your NPS account matures at age 60, the following rules apply:

  • You can withdraw a maximum of 60% of the corpus as a lumpsum, completely tax-free.
  • The remaining minimum 40% must be used to purchase an annuity from a PFRDA-empanelled life insurance company. This annuity provides you a monthly pension for life.
  • If the total corpus is ₹5 lakh or less, you can withdraw the entire amount as a lumpsum without purchasing an annuity.
  • You can defer withdrawal up to age 75. Partial withdrawals of up to 25% of your own contributions are also allowed after 3 years for specific purposes like higher education, home purchase, or medical treatment.

Advantages of NPS

  • Highest additional tax deduction: The exclusive ₹50,000 deduction under Section 80CCD(1B) is available only through NPS, making it the most tax-advantaged retirement instrument beyond ₹1.5 lakh.
  • Market-linked returns: Unlike PPF or FD, NPS equity allocation can generate inflation-beating returns over the long term, potentially building a much larger corpus.
  • Ultra-low charges: NPS has one of the lowest fund management charges in the world — around 0.01–0.09% per annum — compared to 0.5–2% for mutual funds.
  • Portability: Your NPS account (PRAN — Permanent Retirement Account Number) stays with you for life regardless of job changes or location changes.
  • Government oversight: Regulated by PFRDA with strict governance, giving high confidence in fund safety.

Frequently Asked Questions

For NPS Tier I, the minimum contribution per year is ₹1,000, and you must make at least one contribution per financial year to keep the account active. There is no prescribed monthly minimum — you can contribute as infrequently as once a year, as long as the annual total is at least ₹1,000. For NPS Tier II, the minimum contribution at account opening is ₹1,000, and subsequent contributions must be at least ₹250 with no minimum annual requirement.
Under the new tax regime, most deductions are not available — including Section 80C, 80CCD(1), and 80CCD(1B). However, one important NPS benefit is retained under the new regime: Section 80CCD(2), which allows a deduction for the employer's NPS contribution (up to 10% of salary for private sector, 14% for central government employees). This is a significant benefit for salaried employees whose employer contributes to NPS, as it reduces their taxable salary directly even under the new regime.
Full premature exit from NPS before age 60 is allowed after completing at least 3 years of NPS. However, you can only withdraw a maximum of 20% as a lumpsum (taxable) and must use at least 80% to purchase an annuity — which is far less favourable than the 60% lumpsum available at maturity. Additionally, partial withdrawals of up to 25% of your own contributions are permitted after 3 years for specific purposes: children's higher education or marriage, home purchase or construction, treatment of specified illnesses, or setting up a business. A maximum of 3 partial withdrawals are allowed with a 5-year gap between withdrawals.
Both NPS and PPF are excellent retirement vehicles, but they serve different needs. PPF offers government-guaranteed, fixed returns (currently 7.1%) with EEE tax status — making the entire maturity tax-free. NPS offers market-linked returns (potentially 10–12% with equity allocation) and additional tax benefits through the exclusive ₹50,000 Section 80CCD(1B) deduction, but 40% of the corpus must go into an annuity at maturity (though the 60% lumpsum is tax-free). For long-term wealth building and higher post-tax returns, NPS with equity allocation tends to outperform PPF significantly, especially for investors with 20+ years to retirement. For guaranteed, completely tax-free returns with zero market risk, PPF is the better choice. Ideally, a combination of both maximises tax efficiency and diversification.