NPS Calculator — Pension Corpus & Monthly Pension
Project your National Pension System corpus, the tax-free lump sum (60%), annuity portion (40-100%), and monthly pension at retirement. Includes Sec 80CCD(1B) extra ₹50,000 tax break.
Breakdown
| Item | Value |
|---|---|
| Investment period | 30 years (360 months) |
| Total invested | ₹18,00,000 |
| Interest earned | ₹95,02,440 |
| Total corpus at retirement | ₹1,13,02,440 |
| Lump sum withdrawal (60%) | ₹67,81,464 |
| Annuity invested (40%) | ₹45,20,976 |
About this tool
The National Pension System (NPS) is a voluntary, defined-contribution retirement savings scheme regulated by PFRDA. Subscribers contribute monthly (or in lump sums) into an individual pension account, which invests across equity, corporate bonds, government securities, and alternative assets based on the investor's asset allocation choice. At retirement (age 60), subscribers can withdraw up to 60% of the accumulated corpus as a tax-free lump sum, and the remaining minimum 40% is used to buy an annuity that pays a monthly pension for life.
The tax efficiency of NPS makes it especially attractive for salaried professionals: in addition to the ₹1.5 lakh Sec 80C deduction (shared with PPF, ELSS, EPF, life insurance premiums), NPS offers an additional ₹50,000 deduction under Sec 80CCD(1B). For a 30% slab taxpayer, that translates to ₹15,600 in extra tax savings per year — before any returns are considered. WRRK's NPS calculator runs the standard compound-growth formula in your browser, then splits the corpus into the lump-sum and annuity portions and shows the monthly pension you can expect.
How to use the calculator (5 steps)
- Enter ages. Current age (18-60) and retirement age (60-70). Standard retirement is 60; NPS allows deferring up to 70.
- Enter monthly contribution. Minimum ₹500/month to keep the account active and qualify for tax benefits. Typical: ₹4,167/mo (₹50K/yr) to maximise the Sec 80CCD(1B) deduction.
- Set expected return. Long-term NPS returns are 8-12%. Default 10% reflects a balanced equity-debt mix. Equity-heavy plans target the upper end.
- Set annuity rate & %. Annuity rate (4-7%) is what the insurer pays per year. Annuity % (40-100%) is how much of your corpus goes to annuity — minimum 40% by law.
- Read the breakdown. Right panel shows monthly pension, total corpus, tax-free lump sum, and the annuity portion. Compare scenarios using the quick presets.
NPS at a glance
| Item | Detail |
|---|---|
| Eligibility | Indian citizens 18 - 70 |
| Min annual contribution | ₹6,000 (Tier I), ₹500 minimum per transaction |
| Tax benefit (employee) | Sec 80C ₹1.5L + Sec 80CCD(1B) ₹50K extra |
| Lump sum at 60 | Up to 60% — fully tax-free |
| Annuity | Min 40% of corpus, monthly pension taxable |
Use cases
- Salaried tax planning — maximise Sec 80CCD(1B) ₹50K deduction
- Compare 40% vs 60% vs 100% annuity allocation
- Retirement-readiness check — is my pension enough?
- Decide between NPS and PPF for long-term savings
- Project corpus for early retirement at 55 vs 60 vs 65
- Help parents plan a deferred-retirement strategy (60 → 70)
- Budget annual NPS top-ups before financial year-end
Frequently asked questions
+−What is the NPS formula?
Corpus = M × [((1+i)^N − 1) ÷ i], where M is the monthly contribution, i is the monthly return (annual ÷ 12 ÷ 100), and N is the number of months until retirement. At 60, you can withdraw up to 60% as a tax-free lump sum; at least 40% must be used to buy an annuity. Monthly pension = (annuity corpus × annuity rate) ÷ 12.
+−How much tax do I save with NPS?
Up to ₹1.5 lakh under Sec 80C (combined with PPF, ELSS, EPF) plus an additional ₹50,000 under Sec 80CCD(1B) — exclusive to NPS. So a salaried investor in the 30% slab saves up to ₹15,600 extra tax per year just by routing ₹50K to NPS via Sec 80CCD(1B).
+−What is the minimum and maximum annuity I must buy?
By PFRDA rules, you must use at least 40% of the corpus to buy an annuity (insurance product that pays a regular pension). The remaining 60% can be withdrawn as a tax-free lump sum. You can also voluntarily allocate more than 40% (up to 100%) to annuity if you want a higher monthly pension.
+−Are NPS returns guaranteed?
No. NPS invests in a mix of equity (E), corporate bonds (C), government securities (G) and alternative assets (A) based on your asset allocation. Long-term historical returns have been 9-12% for equity-heavy plans and 7-9% for debt-heavy plans. The default in this calculator is 10%, which is a balanced assumption.
+−What is an annuity rate?
When you retire, you take 40-100% of the corpus and hand it to a PFRDA-empaneled life insurer, which pays you a regular pension for life. The annuity rate is the percentage of the corpus paid out per year — typically 4-7% depending on the annuity option (life only, joint life, return of purchase price, etc). Higher annuity rates usually mean fewer guarantees.
+−Is the lump sum withdrawal taxable?
No. Up to 60% of the NPS corpus withdrawn at age 60 is fully tax-exempt under Sec 10(12A) of the Income Tax Act. The annuity income, however, is taxable as 'income from other sources' in the year you receive it.
+−Can I exit NPS before age 60?
Yes, but with restrictions. Pre-mature exit requires using at least 80% of the corpus to buy an annuity, with only 20% available as lump sum. NPS is designed as a retirement product, so exit before 60 defeats most of the tax benefits. Partial withdrawals (up to 25% of own contribution) are allowed for specific reasons after 3 years.
Related on WRRK Tools
Mutual Fund SIP — total invested, gains, growth
ToolValidate Indian GSTIN + check digit
ToolIndian bank IFSC → branch, address, MICR
CategoryBrowse the full india tools category
Govt exam350×350px · 20-300KB
CompareHonest comparison: features, pricing, signup