NPS Calculator
The National Pension System turns decades of small monthly contributions into a retirement corpus, then splits that corpus in two: a lump sum you can take as cash, and a portion that must buy a lifelong pension. This calculator projects the corpus from your contributions, shows both parts, and estimates the monthly pension, including the one thing most NPS calculators hide, which is how much that pension swings with the annuity rate the insurer offers. It is an educational estimate for planning, not investment advice. For a decision about your own retirement money, a SEBI-registered investment adviser is the right person to ask.
Your age today.
NPS Tier I is locked until 60. Deferral of exit is allowed up to 75.
Tier I needs only ₹500 a year to stay active; most contribute monthly.
NPS is market-linked, not guaranteed. Long-run blended returns run about 9% to 11%; equity funds have run higher, government-bond funds around 8%.
The share locked into a lifelong pension. 40% is the long-standing minimum (still on PFRDA's FAQ and the rule for government subscribers); a Dec 2025 amendment cut it to 20% for many non-government subscribers.
The rate the insurer pays on the annuity. Real 2025 NPS annuity rates run about 6% to 7%, tracking 10-year G-Sec yields.
Projected corpus at age 60
₹1,13,96,627
- Total you invest
- ₹18,00,000
- Tax-free lump sum (up to 60%)
- ₹68,37,976
- Locked into annuity
- ₹45,58,651
- Monthly pension (taxable)
- ₹24,693
Your monthly pension by annuity rate
| Annuity rate | Monthly pension |
|---|---|
| 6% | ₹22,793 |
| 6.5% | ₹24,693 |
| 7% | ₹26,592 |
Move the annuity rate half a point and the pension moves with it. That single assumption, set by the insurer at the time you buy, decides your pension more than any input above.
How does the NPS calculator work?
The NPS calculator projects your Tier I corpus by compounding your monthly contributions at an expected return, then splits it into the mandatory annuity and the lump sum and estimates the pension. You enter your age now, your retirement age, your monthly contribution, an expected return, the share of the corpus you will annuitise, and an expected annuity rate. It compounds the contributions month by month to your retirement age, applies the annuity split, and divides the annuitised amount by the annuity rate to get a monthly pension.
Two inputs deserve honesty. NPS is market-linked, so the return is an assumption, not a promise, and this tool defaults to 10% a year, below the aggressive 14% some calculators use in their examples. The annuity rate, the rate the insurer pays on your pension pot, is set only at the moment you buy the annuity, which is why the tool shows the pension across a whole 6% to 7% band.
How much of your NPS corpus must go to a pension?
At exit from NPS at age 60, a minimum share of your corpus must buy a lifelong annuity, and the rest can be withdrawn as a lump sum. The long-standing rule, still shown on PFRDA's own FAQ and still applying to government subscribers, is a minimum 40% annuity and up to 60% as a lump sum, with full withdrawal allowed when the corpus is Rs 5 lakh or less.
That rule changed for many others. In December 2025, PFRDA notified the NPS Exits and Withdrawals (Amendment) Regulations, cutting the minimum annuity to 20% for many non-government subscribers, allowing a full lump sum for corpuses up to Rs 8 lakh, and extending the deferral age to 85. PFRDA's public FAQ still displays the old numbers, and the treatment of corpuses above Rs 12 lakh is still being read differently by different sources, so the honest move is to confirm the current rule on the PFRDA or CRA portal before you exit. The calculator lets you set the annuity share yourself, so it works under either version.
How is NPS taxed when you retire?
When you exit NPS at 60, up to 60% of the corpus taken as a lump sum is tax-free under Section 10(12A), while the pension from the annuity is taxed at your slab rate in the year you receive it. That split is the part beginners miss, and one widely-ranked calculator states the reverse, that the 60% lump sum is taxed, which is wrong under current law.
The pension being taxable matters more than it sounds. A Rs 20,000 monthly pension is Rs 2.4 lakh of taxable income a year, taxed like salary, so the headline pension is a pre-tax number. One caveat from the December 2025 change: now that a larger lump sum is allowed for some subscribers, only the first 60% is explicitly tax-free under existing law, and the tax status of the extra portion has not yet been clarified by the Finance Ministry. A CA can confirm your position.
Can you claim NPS tax deductions under the new regime?
Most NPS tax deductions apply only under the old regime, with one exception that survives the new default regime: the employer contribution under Section 80CCD(2). For a 2026 audience largely on the new regime, this is the detail that changes the maths.
Under the old regime, your own contribution is deductible under Section 80CCD(1) within the Rs 1.5 lakh 80C limit, plus an extra Rs 50,000 under Section 80CCD(1B), for up to Rs 2 lakh. Both vanish under the new regime. What remains under the new regime is Section 80CCD(2), your employer's NPS contribution, deductible up to 14% of basic salary plus dearness allowance for private-sector employees from FY 2025-26, raised from 10% in Budget 2024. So under the new regime, employer NPS is the only piece that still cuts your tax.
NPS vs EPF vs PPF: how do they compare?
NPS, EPF and PPF are the three pillars of Indian retirement saving, and they differ most on returns, lock-in, and how the maturity is taxed. The table sets them side by side, the comparison the calculator's numbers only make sense against.
| Feature | NPS (Tier I) | EPF | PPF |
|---|---|---|---|
| Return | Market-linked, about 9% to 11% | 8.25% (FY 2024-25, EPFO) | 7.1% (Jul-Sep 2026) |
| Lock-in | Until age 60 | Until retirement or job exit | 15 years |
| Tax at maturity | 60% lump sum tax-free, pension taxable | Fully tax-free (EEE) | Fully tax-free (EEE) |
| Liquidity | Lowest, the annuity is locked | Partial withdrawals allowed | Partial from year 7 |
| Regulator | PFRDA | EPFO | Ministry of Finance |
The trade NPS makes is clear in the table. It offers the highest potential return, because part of it sits in equity, in exchange for the lowest liquidity, because a chunk of the corpus is locked into an annuity you cannot take as cash. EPF and PPF grow more slowly and stay fully tax-free at maturity. Which one fits turns on your age, tax regime and how much liquidity you need, a question for a qualified adviser rather than a calculator.
Pair this calculator with the guide
For how NPS actually works, the fund choices, the Tier I versus Tier II split, and the full withdrawal rules, read the National Pension System guide. To see where NPS sits among India's other government schemes, the government schemes hub lays them out together. And because the 80CCD deductions turn on your tax regime, whether the old or new regime is cheaper for you is the related calculation in the income tax slab guide.
Frequently asked questions
How is the NPS pension calculated?
Your NPS monthly pension is the annuitised part of your corpus multiplied by the annuity rate, divided by 12. At exit you convert a share of the corpus, a minimum set by PFRDA, into an annuity from an insurer, and the insurer pays roughly 6% to 7% a year on that amount. So on a Rs 50 lakh corpus with 40% annuitised (Rs 20 lakh) at 6.5%, the pension is about Rs 10,833 a month. The rate the insurer offers when you buy decides the pension more than any single input above, which is why this calculator shows it across a band.
How much of your NPS corpus is tax-free at retirement?
Up to 60% of the NPS corpus taken as a lump sum at age 60 is tax-free under Section 10(12A) of the Income Tax Act. The rest buys an annuity, and the pension it pays is taxable at your income-tax slab in the year you receive it. A claim you will see online, that the 60% lump sum is taxed, is wrong under current law. One caveat: a December 2025 amendment now allows a larger lump sum for many subscribers, and the tax status of the portion above 60% has not yet been clarified by the Finance Ministry, so confirm before you exit.
Is the 40% annuity mandatory in NPS?
It was, and it still is for government subscribers and on PFRDA's own current FAQ, which shows a 40% minimum annuity and 60% lump sum at 60, with full withdrawal if the corpus is Rs 5 lakh or less. In December 2025, PFRDA amended the exit rules for many non-government subscribers, cutting the minimum annuity to 20% and allowing full withdrawal for corpuses up to Rs 8 lakh. Because PFRDA's FAQ has not been updated and the treatment above Rs 12 lakh is still being read differently by different sources, check the current rule on the PFRDA or CRA portal before planning your exit.
Can you claim NPS tax deductions under the new tax regime?
Mostly no, with one exception. The Section 80CCD(1) deduction within the Rs 1.5 lakh 80C limit and the extra Rs 50,000 under Section 80CCD(1B) are available only under the old tax regime. The one NPS deduction that survives the new regime is Section 80CCD(2), the employer's contribution, deductible up to 14% of basic salary plus dearness allowance for private-sector employees from FY 2025-26, raised from 10% in Budget 2024. A CA can confirm which applies to you.
What return should you assume for NPS?
NPS is market-linked, so no return is guaranteed. Its scheme returns have run roughly 9% to 11% a year blended over the long run, with equity funds higher and government-bond funds around 8%, per PFRDA fund data. This calculator defaults to 10%. Treat any projection as an illustration, not a promise, and a lower assumption gives a more honest floor.
What is a realistic NPS annuity rate?
Real NPS annuity rates from insurers in 2025 run about 6% to 7% a year, tracking 10-year government bond yields. A return-of-purchase-price annuity, which returns your corpus to your nominee, pays a lower rate than one that keeps the corpus. Because the rate is set by the insurer when you buy, this calculator shows the pension at 6%, 6.5%, and 7% so you can see how much the assumption moves the number.
Sources
- Pension Fund Regulatory and Development Authority (PFRDA), Exits for All Citizen Model, FAQ, pfrda.org.in
- PFRDA, NPS Exits and Withdrawals (Amendment) Regulations, 2025, pfrda.org.in
- Income Tax Department of India, Sections 10(12A) and 80CCD, incometax.gov.in
- Employees' Provident Fund Organisation, EPF interest rate, epfindia.gov.in
- Ministry of Finance, small savings interest rates (PPF), nsiindia.gov.in