🏦 Free Online Tool · NPS Tier 1 · FY 2025-26
NPS Calculator Online
National Pension System — Corpus & Pension
Calculate your NPS retirement corpus, monthly pension, lump-sum withdrawal and annuity income — with asset allocation, tax benefits under 80CCD(1B) and year-wise projection.
🏢 NPS Calculator — Private Sector Employee
Monthly Contribution (Employee)
₹500₹1L
Employer Contribution (Monthly)
₹0₹1L
Current Age
1864
Expected Annual Return
6%14%
Annuity Rate (Monthly Pension)
4%9%
Asset Allocation (Active Choice)
Equity (E)50%
Corp Bonds (C)30%
Govt Sec (G)20%
Total Allocation100%
Total Invested (Employee)₹18,00,000
Total Invested (Employer)₹18,00,000
Total Returns Generated₹82,81,374
Total NPS Corpus₹1,18,81,374
Tax deduction 80CCD(1B)Up to ₹50,000/yr extra
NPS Retirement Corpus
₹1.19Cr
at age 60 · 30 years
70%
Returns
Employee Invested₹18L
Employer Invested₹18L
Returns Generated₹82.8L
Total Corpus₹1.19Cr
At Retirement (Age 60)
Lump-sum (60%, tax-free)₹71.3L
Annuity corpus (40%)₹47.5L
Est. monthly pension₹23,753/mo
📅 Year-wise NPS Growth Projection
| Year | Age | Opening (₹) | Emp Contrib (₹) | Empr Contrib (₹) | Returns (₹) | Closing (₹) |
|---|
⚖️ NPS vs PPF vs EPF — Which is Better?
| Feature | NPS | PPF | EPF |
|---|---|---|---|
| Return Type | Market-linked (8–12%) | Fixed (7.1%) | Fixed (8.25%) |
| Risk | Low–Moderate (equity choice) | Zero risk | Zero risk |
| Tax on Investment | 80CCD(1): ₹1.5L + 80CCD(1B): ₹50K | 80C: ₹1.5L | 80C: ₹1.5L |
| Tax on Returns | Tax-free (inside NPS) | Tax-free (EEE) | Tax-free up to ₹2.5L/yr |
| Tax on Withdrawal | 60% tax-free; 40% annuity taxable | Fully tax-free | Fully tax-free (5+ yrs) |
| Lock-in Period | Till age 60 | 15 years | Till retirement |
| Partial Withdrawal | Allowed after 3 yrs (specific reasons) | From Year 7 | Allowed (specific cases) |
| Employer Contribution | ✅ Yes (80CCD(2), no limit) | ❌ No | ✅ Yes (3.67%) |
| Monthly Pension | ✅ Yes (40% annuity) | ❌ No | ✅ EPS pension |
| Best For | Retirement + higher growth | Safe, tax-free savings | Salaried employees |
📐
NPS Tax Benefits
NPS offers the highest tax deduction of any investment in India — across three sections:
80CCD(1): Up to ₹1.5L/yr (within 80C limit)
80CCD(1B): Additional ₹50,000/yr (exclusive — not part of 80C cap)
80CCD(2): Employer's contribution — fully deductible, no upper limit
Total potential: ₹2L+ deduction per year for employees
80CCD(1B): Additional ₹50,000/yr (exclusive — not part of 80C cap)
80CCD(2): Employer's contribution — fully deductible, no upper limit
Total potential: ₹2L+ deduction per year for employees
🔄
Asset Allocation in NPS
NPS offers two investment choices:
Auto Choice: Age-based auto-rebalancing (reduces equity as you age)
Active Choice: You decide split between:
• E (Equity): Max 75%, higher risk/return
• C (Corp Bonds): Medium risk
• G (Govt Securities): Safest, lowest return
Young investors: High E allocation maximises long-term corpus
Active Choice: You decide split between:
• E (Equity): Max 75%, higher risk/return
• C (Corp Bonds): Medium risk
• G (Govt Securities): Safest, lowest return
Young investors: High E allocation maximises long-term corpus
🏦
NPS Withdrawal Rules
At maturity (age 60), NPS allows:
60% lump-sum: Fully tax-free withdrawal
40% annuity: Mandatory pension (taxable as income)
Partial withdrawal: After 3 years for specific goals (education, marriage, medical, home purchase) — up to 25% of own contributions
Early exit: Before 60 — 20% lump-sum, 80% annuity
40% annuity: Mandatory pension (taxable as income)
Partial withdrawal: After 3 years for specific goals (education, marriage, medical, home purchase) — up to 25% of own contributions
Early exit: Before 60 — 20% lump-sum, 80% annuity
Frequently Asked Questions
NPS (National Pension System) is a government-regulated retirement savings scheme open to all Indian citizens aged 18–70. It covers central and state government employees (mandatory), private sector employees (voluntary), and self-employed individuals. NRIs can also invest in NPS.
Section 80CCD(1B) provides an additional deduction of ₹50,000 per year for NPS contributions — over and above the ₹1.5L limit under Section 80C. This is exclusive to NPS and is one of the few instruments that offer a deduction above the standard ₹1.5L ceiling. For someone in the 30% tax bracket, this alone saves ₹15,600 in annual tax.
Tier 1 is the mandatory pension account with lock-in till age 60, tax benefits under 80C and 80CCD(1B), and restricted withdrawals. Tier 2 is a voluntary savings account with no lock-in and full flexibility for withdrawal — but no tax benefits (except for government employees). Most investors use Tier 1 for retirement and Tier 2 as a liquid investment if needed.
At retirement, 40% of the NPS corpus must be used to purchase an annuity from PFRDA-registered insurers. Monthly pension = (40% of corpus × annuity rate) ÷ 12. Current annuity rates range from 4% to 8% depending on the type (with or without return of purchase price, joint-life option, etc.). The pension is taxable as income in the year of receipt.
Partial withdrawal is allowed after 3 years of NPS subscription for specific purposes: children's education/marriage, purchase or construction of house, treatment of specified illnesses. You can withdraw up to 25% of your own contributions. Maximum 3 partial withdrawals are allowed during the entire tenure. Premature exit (before age 60) requires 80% to go into annuity and only 20% as lump sum.
Yes — especially because of the employer contribution benefit under 80CCD(2). If your employer contributes to NPS (up to 10% of Basic+DA for private sector, 14% for govt), the entire employer contribution is deductible from taxable income with no upper limit. Combined with the 80CCD(1B) benefit, NPS can offer ₹2L+ in additional deductions. The market-linked returns also offer higher long-term growth than EPF or PPF.
You can open NPS online through the eNPS portal (enps.nsdl.com) using Aadhaar-based OTP authentication or PAN + bank details. It takes 15–20 minutes. Alternatively, open through any bank (Point of Presence), post office, or your employer's HR. You'll get a PRAN (Permanent Retirement Account Number) — a unique 12-digit number that stays with you across employers. Consult TAXAJ for NPS tax planning →
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Our CA team helps you claim 80CCD(1), 80CCD(1B) and 80CCD(2) deductions correctly in your ITR — saving thousands in tax while building your retirement corpus.
