What is the National Pension System (NPS)?
The National Pension System (NPS) is a voluntary, market-linked retirement scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). You contribute regularly during your working years, your money is invested in a mix of equity, corporate bonds and government securities, and at retirement you receive a lump sum and a monthly pension bought with an annuity.
Any Indian citizen aged 18 to 70 can join. This NPS calculator estimates your corpus at 60, the lump sum you can withdraw and the monthly pension you could receive, based on your monthly contribution, age and expected return.
How the NPS Calculator Works
The calculator compounds your monthly contribution at the expected annual return until age 60:
P = monthly contribution · i = annual return ÷ 12 ÷ 100 · n = months till 60
A portion of the corpus buys an annuity from an insurer, which pays a lifelong pension. The calculator assumes 40% annuity at an annuity rate of 6% a year, which is a cautious assumption. The rest is the lump sum:
NPS Pension Examples (₹10,000 a Month at 10% Return)
| Starting age | Years | You invest | Corpus at 60 | Lump sum (60%) | Monthly pension |
|---|---|---|---|---|---|
| 25 | 35 | ₹42,00,000 | ₹3.83 crore | ₹2.30 crore | ₹76,566 |
| 30 | 30 | ₹36,00,000 | ₹2.28 crore | ₹1.37 crore | ₹45,587 |
| 35 | 25 | ₹30,00,000 | ₹1.34 crore | ₹80.3 lakh | ₹26,758 |
| 40 | 20 | ₹24,00,000 | ₹76.6 lakh | ₹45.9 lakh | ₹15,314 |
What the table tells you
Starting at 25 instead of 35 costs only ₹12 lakh more in contributions but gives a corpus nearly three times as large. A delay of ten years is the most expensive mistake in retirement planning.
Pension figures use 40% annuity at 6%. If you buy a bigger annuity or the annuity rate is higher, the pension will be higher.
NPS Tax Benefits
- Section 80CCD(1): your contribution is deductible within the overall ₹1.5 lakh limit of Section 80C (old tax regime).
- Section 80CCD(1B): an additional deduction of up to ₹50,000 for your own NPS contribution (old tax regime).
- Section 80CCD(2): your employer’s contribution is deductible up to 10% of basic plus DA (14% in the new tax regime), and this one is available in the new regime too.
- At exit: the lump sum within the permitted limit is tax-free, while the annuity income is taxable as per your slab.
NPS Withdrawal and Exit Rules
Before December 2025, non-government subscribers had to put at least 40% of the corpus in an annuity and could withdraw up to 60% as a lump sum at 60. In December 2025 PFRDA revised the exit rules for non-government subscribers: the minimum annuity was reduced to 20%, so up to 80% can be taken as a lump sum when the corpus is above a threshold (reports mention ₹12 lakh), and smaller corpuses can be withdrawn fully. The subscription can also continue till age 85.
Because the exact thresholds and tax treatment of the extra lump sum have been reported differently, please confirm the latest rule on the PFRDA website or with your pension fund before planning. This calculator uses the conservative 40% annuity by default.
How to Use This NPS Calculator
- Enter your monthly contribution (minimum ₹500).
- Select your current age. The calculator assumes retirement at 60.
- Choose the expected return. Equity-heavy NPS portfolios have been assumed at 9% to 12% in long-term projections, but returns are not guaranteed.
- Read the corpus, lump sum and monthly pension, then save an A4 report with Preview & Save.
NPS vs EPF vs PPF
NPS is market-linked, so its returns can be higher than EPF or PPF but are not guaranteed. EPF and PPF give assured returns of 8.25% and 7.1%. A balanced retirement plan often uses all three: EPF as the base, PPF as a safe tax-free addition and NPS for growth and the extra ₹50,000 deduction. Try the EPF calculator and PPF calculator to compare.
How Much NPS Contribution is Enough?
Decide the monthly pension you want in today’s money, adjust for inflation and work backwards. For instance, a pension of ₹50,000 a month 30 years from now, with a 6% annuity rate, needs an annuity corpus of about ₹1 crore. If that is 40% of the total corpus, you need about ₹2.5 crore at 60, which at 10% return needs roughly ₹11,000 a month from age 30 (the table above shows ₹10,000 from age 30 gives about ₹2.28 crore).
- Choose Active choice if you want to control the equity share (up to 75% till 50, then falling with age), or Auto choice with a life-cycle fund.
- Review your fund manager and allocation once a year.
- Use the extra ₹50,000 deduction under Section 80CCD(1B) if you are in the old tax regime.