NPS Calculator
The National Pension System is India's dedicated retirement vehicle: market-linked growth while you work, plus an extra ₹50,000 tax deduction under 80CCD(1B) that even 80C can't give you. At 60, you withdraw up to 60% tax-free and convert at least 40% into a pension-paying annuity.
Example: ₹5,000/month for 25 years at 10% builds about ₹66.5 lakh. The 40% annuity (₹26.6 lakh) then pays roughly ₹13,300/month for life at a 6% annuity rate — your self-made pension.
Four steps, thirty seconds.
Enter your monthly NPS contribution. Minimum ₹500/month; Tier I is the retirement account.
Set expected return and years. 9–11% is the historical ballpark for NPS equity-heavy allocations.
Choose your annuity %. Minimum 40% at 60; higher means more pension, less lumpsum.
Read the pension figure. That's your estimated monthly income for life — then decide if you need to contribute more.
Corpus: SIP future-value formula on monthly contributions. Pension: annuity value × 6% ÷ 12 (illustrative annuity rate).
Worked example: as above — ₹15 lakh invested becomes ₹66.5 lakh; the annuity leg pays a lifelong monthly pension.
NPS structure per PFRDA regulations (60% tax-free withdrawal, 40% minimum annuitisation); return assumptions from historical NPS scheme performance data.
Under 80CCD(1B), NPS contributions get an additional ₹50,000 deduction beyond 80C's ₹1.5 lakh — the only legal way to stretch tax-saving past the 80C ceiling. Old regime only.
Our NPS vs PPF guide compares them fully. Short version: NPS offers higher market-linked growth with partial taxable withdrawal; PPF offers guaranteed tax-free returns with a 15-year lock-in.
Annuity rates vary by insurer, age and option — recently around 6–7% for a plain life annuity at 60. The calculator uses 6% as a conservative illustration.
Partial withdrawals are allowed after 3 years for specific needs (medical, education, home), capped at 25% of contributions. Premature exit rules are stricter — NPS rewards staying till 60.
Tier II is a flexible investment account with no tax benefits and no lock-in — basically a mutual fund with extra steps. For most people, Tier I (retirement) is the point of NPS.
Disclaimer: Educational illustration only — not financial advice. Pension estimated at an illustrative 6% annuity rate; actual rates vary. NPS returns are market-linked.