National Pension Scheme (India) Calculator
Plan your NPS retirement with our calculator. Estimate corpus from monthly contributions with annual compounding. Compare lump sum and monthly pension.
About This Calculator
The National Pension Scheme (NPS) Calculator helps you estimate your retirement corpus based on monthly employee and employer contributions, your current age, retirement age, and expected annual return rate. NPS is a voluntary defined-contribution pension system regulated by the Pension Fund Regulatory and Development Authority (PFRDA) in India.
Our calculator uses the standard future value formula with annual compounding: contributions made each year grow at the expected return rate over the investment horizon. For Tier I accounts, 60% of the final corpus can be withdrawn as a tax-free lump sum at age 60, while 40% must be used to purchase an annuity providing a regular monthly pension. Tier II accounts have no withdrawal restrictions.
Results include total corpus at retirement, total contributions, investment returns, yearly growth breakdown, and (for Tier I) estimated lump sum amount and monthly pension. Use the growth chart to visualize how your corpus builds over time.
NPS is a voluntary defined-contribution pension system available to all Indian citizens aged 18-70, regulated by the Pension Fund Regulatory and Development Authority (PFRDA). Employee contributions qualify for tax deductions under Section 80CCD(1) (up to ₹1.5 lakh within Section 80C) and Section 80CCD(1B) (additional ₹50,000). Employer contributions up to 14% of basic salary plus DA are deductible under Section 80CCD(2).
Frequently Asked Questions
What is the National Pension Scheme (NPS)?
The National Pension Scheme (NPS) is a voluntary, defined-contribution retirement savings scheme regulated by PFRDA in India. It is available to all Indian citizens aged 18-70 and offers two tiers: Tier I (mandatory retirement account with lock-in) and Tier II (voluntary savings with flexible withdrawals).
How is NPS Tier I maturity amount calculated?
At maturity (age 60), 60% of the NPS Tier I corpus can be withdrawn as a tax-free lump sum. The remaining 40% must be used to purchase an annuity, which provides a regular monthly pension. The annuity rate is typically around 6% per annum, so the monthly pension is approximately 0.5% of the annuity purchase amount.
What are the tax benefits of investing in NPS?
Employee contributions up to 10% of salary (basic + DA) qualify for deduction under Section 80CCD(1) within the overall ₹1.5 lakh limit of Section 80C. An additional deduction of up to ₹50,000 is available under Section 80CCD(1B) for self-contributions. Employer contributions up to 14% (central government) or 10% (others) of salary are deductible under Section 80CCD(2) over and above the 80C limit.
What is the difference between NPS Tier I and Tier II?
NPS Tier I is a retirement account with a lock-in until age 60, offering tax benefits under Sections 80CCD(1) and 80CCD(1B). Tier II is a voluntary savings account with no lock-in or withdrawal restrictions but no tax benefits. You can withdraw from Tier II at any time without penalty.
What is the default expected return rate for NPS?
NPS funds are invested in a mix of equity, corporate bonds, and government securities. Historical returns have ranged from 8% to 14% depending on asset allocation. The calculator defaults to 10% per annum, which is a reasonable long-term expectation for a balanced NPS portfolio with equity exposure.
Can I continue NPS after retirement?
Yes, you can defer your NPS corpus withdrawal up to age 75. During deferment, your accumulated corpus continues to earn returns. You can also take partial withdrawals (up to 25% of self-contributions) after 3 years of joining for specific purposes like children's education, marriage, or home purchase.
Who is eligible for the National Pension Scheme?
Any Indian citizen aged between 18 and 70 years can open an NPS account. Both salaried employees (with employer contributions) and self-employed individuals can subscribe. NRI accounts are also permitted under NPS.
How does employer contribution work in NPS?
Many employers contribute to their employees' NPS Tier I accounts as part of the compensation package. Central government employees receive a 14% employer contribution, while other organizations typically contribute 10% of basic salary plus DA. Employer contributions are tax-deductible under Section 80CCD(2) up to 14% of salary.