NPS Calculator
Plan your National Pension Scheme investment and see your projected corpus split into lump sum (60%) and annuity (40%).
Total Invested
₹15 L
Total Corpus
₹62.2 L
Lump Sum (60%)
₹37.3 L
Annuity (40%)
₹24.9 L
Investment Breakdown
NPS Calculator – National Pension Scheme Returns
What is NPS?
The National Pension System (NPS) is a government-sponsored retirement savings scheme open to all Indian citizens. It's a defined-contribution pension plan where you invest during your working years and receive a pension at retirement (age 60). NPS offers market-linked returns through professionally managed fund managers.
NPS has two account types: Tier-I (mandatory, tax-advantaged, withdrawal restrictions) and Tier-II (voluntary, liquid, no tax benefits). Contributions to Tier-I qualify for additional Section 80CCD(1B) deduction of ₹50,000 beyond the Section 80C limit.
How Does the NPS Calculator Work?
The NPS calculator estimates your retirement corpus based on monthly contributions, expected return rate, and years until retirement. At age 60, you must use at least 40% of the corpus to buy an annuity (pension), and can withdraw up to 60% as a lump sum (tax-free).
For example, contributing ₹5,000/month at 10% expected return for 30 years builds a corpus of approximately ₹1.14 crore. At retirement, you can withdraw ₹68.4 lakh tax-free and use ₹45.6 lakh to buy an annuity providing monthly pension.
NPS Tax Benefits
Section 80CCD(1): Deduction up to 10% of salary (₹1.5 lakh under overall 80C limit) for employees, or 20% of gross income for self-employed. Section 80CCD(1B): Additional ₹50,000 deduction exclusively for NPS Tier-I contributions. Section 80CCD(2): Employer's NPS contribution up to 10% of salary (14% for central government employees) — this is over and above the 80C limit.
The ₹50,000 exclusive deduction under 80CCD(1B) makes NPS the only investment that extends your tax-saving beyond the ₹1.5 lakh 80C ceiling.
NPS vs PPF vs EPF
NPS offers market-linked returns (potentially 9–12%) with mandatory annuity purchase. PPF offers guaranteed returns (7.1%) with full tax exemption and 15-year lock-in. EPF offers guaranteed returns (8.25%) for salaried employees with employer matching. For maximum retirement savings, use all three: EPF (mandatory), PPF (tax-free guaranteed), and NPS (additional tax benefit + higher growth potential).
Frequently Asked Questions
Partial withdrawal from Tier-I is allowed after 3 years for specific purposes (up to 25% of contributions): children's education/marriage, home purchase, medical emergency. You can withdraw up to 3 times during the entire tenure with a 5-year gap between withdrawals.
At age 60, you must use at least 40% to buy an annuity from an IRDA-approved insurer. You can withdraw up to 60% as a lump sum (tax-free). If the corpus is below ₹5 lakh, you can withdraw 100%. You can also defer withdrawal until age 70.
No. NPS returns are market-linked and depend on your chosen asset allocation (equity, corporate bonds, government securities). Historically, NPS schemes have delivered 9–12% annualized returns over 5+ year periods. The annuity rate at retirement is also market-dependent.
Tier-I is the mandatory retirement account with tax benefits, withdrawal restrictions, and mandatory annuity purchase at 60. Tier-II is a voluntary savings account with no lock-in, no tax benefits, and free withdrawals. Think of Tier-I as retirement savings and Tier-II as a liquid investment account.
NPS offers three asset classes: Equity (E) — high growth, max 75% allocation; Corporate Bonds (C) — moderate risk; Government Securities (G) — low risk, guaranteed. For those under 40, consider 50–75% equity, 15–25% corporate bonds, 10–25% government securities. Reduce equity allocation as you approach retirement.
Yes. Open an NPS account online through the eNPS portal (enps.nsdl.com) or via your bank's net banking. You'll need PAN, Aadhaar, and a mobile number linked to Aadhaar. The process takes 15–20 minutes. You'll receive a PRAN (Permanent Retirement Account Number) instantly.
For Tier-I: minimum ₹500 per contribution and ₹1,000 per financial year. At least one contribution per year is mandatory to keep the account active. For Tier-II: minimum ₹250 per contribution. Missing the annual minimum leads to account freezing, which can be reactivated by paying the minimum plus a penalty of ₹100.
NPS offers higher potential returns (9–12% vs 7.1%) and additional ₹50,000 tax deduction under 80CCD(1B), but requires mandatory annuity purchase (40% of corpus). PPF offers guaranteed returns, full tax exemption (EEE), and complete withdrawal at maturity. Use both — NPS for growth and tax savings, PPF for guaranteed tax-free returns.
If an NPS subscriber dies, the entire corpus (100%) is paid to the nominee or legal heir. The mandatory 40% annuity rule doesn't apply in case of death. The nominee can receive the amount as a lump sum. It's important to keep nominee details updated in your NPS account.