NPS Calculator

NPS maturity depends on contributions, market returns of chosen funds (E for equity, C for corporate bonds, G for government securities), and age at retirement. At 60, you must use 40% of the corpus to buy an annuity (mandatory); the remaining 60% can be withdrawn lump sum. Example: ₹10,000/month for 30 years at 10% average returns gives roughly ₹2.27 crore. At 60, ₹91 lakh goes to annuity (provides monthly pension), and ₹1.36 crore is lump sum withdrawal. Returns vary based on fund mix. The calculator simulates different asset allocations.

Pension from NPS depends on the annuity-mandatory portion (40%+ of corpus) and the annuity rate at retirement. Annuity rates currently range 5.5-7%. Example: ₹2 crore corpus → ₹80 lakh in annuity → roughly ₹40,000-46,000 monthly pension (depending on annuity option and age). Choosing 100% annuity gives more pension but no lump sum. Choosing 40% annuity gives less pension but more lump sum to invest yourself. Joint life annuity (covers spouse) reduces monthly amount. NPS pensions are partially taxable. The calculator simulates different annuity scenarios.

Minimum mandatory annuity in NPS is 40% of the corpus at age 60. Many people choose more — 50-60% — for higher pension security. The trade-off: less lump sum to invest yourself. Higher annuity = stable monthly income but limited flexibility. Lower annuity = more capital control but you bear the longevity risk. If you have other pension sources (EPF, FD interest), 40% annuity is fine. If NPS is your primary retirement income, 60-70% may be wiser. Annuity is irrevocable — choose carefully. The calculator shows different annuity ratios and resulting pensions.

NPS offers triple tax benefits. Contributions up to ₹1.5 lakh qualify under Section 80C (shared with PPF, EPF, ELSS). Additional ₹50,000 deduction is exclusive to NPS under Section 80CCD-1B — this is a unique benefit. Employer NPS contributions (up to 10% of basic+DA) are deductible under 80CCD(2) without limit, in addition to the above. At maturity: 60% lump sum is tax-free; 40% annuity income is taxable as per slab. The 80CCD-1B ₹50,000 deduction alone can save ₹15,600 (30% slab) in tax annually. Highly tax-efficient for senior employees.

NPS Tier 1 is the main retirement account — locked till age 60, with mandatory annuitisation at withdrawal. Contributions get tax benefits (80C + 80CCD-1B). NPS Tier 2 is a voluntary, fully flexible savings account. No lock-in, withdraw anytime. No tax benefits for most subscribers (only government employees get 80C benefit on Tier 2 with 3-year lock-in). Tier 2 is essentially a low-cost mutual fund. Most retail investors use only Tier 1 for retirement. The calculator focuses on Tier 1 for pension projections.

Yes, with conditions. Partial withdrawal (up to 25% of own contributions) is allowed after 3 years of subscription, for specific purposes: education, marriage, home, medical emergencies, or starting a business. Limited to 3 partial withdrawals over the entire NPS tenure. Premature exit before 60 requires 80% mandatory annuitisation (only 20% as lump sum) — which is harsh. After 60, normal withdrawal applies (60% lump sum, 40% annuity). NPS is best treated as a strict retirement vehicle, not a flexible savings account. The calculator shows the impact of premature withdrawals.

NPS gives equity exposure (up to 75% in E-class), giving higher long-term returns than PPF (which is debt-only). Over 30 years, NPS at 10-11% can outperform PPF at 7.1% by a wide margin. NPS also gets the additional ₹50,000 deduction under 80CCD-1B. Downsides: mandatory 40% annuitisation reduces flexibility, annuity income is taxable, and corpus is locked till 60. PPF is fully tax-free, more liquid (after 15 years), but lower returns. Best approach: use both. NPS for growth and tax savings, PPF for stability. The calculator compares both side by side.