NPS Calculator
Project retirement corpus and tax benefits from National Pension System investments
The National Pension System (NPS) is a voluntary, long-term retirement savings scheme designed to enable systematic savings during the working life of a subscriber. NPS offers two types of accounts:
- Tier I Account: Retirement account with tax benefits but restricted withdrawals
- Tier II Account: Voluntary savings account with no tax benefits but complete liquidity
NPS Investment Analysis
Estimated Retirement Corpus
Projected value at retirement age
| Years Until Retirement | 0 years |
|---|---|
| Total Contribution (Tier I) | ₹ 0 |
| Total Contribution (Tier II) | ₹ 0 |
| Total Interest Earned | ₹ 0 |
| Annual Tax Savings (Current Year) | ₹ 0 |
Corpus Growth Projection
Tax Benefits Breakdown
| Deduction Type | Eligible Amount | Maximum Limit | Tax Saving |
|---|---|---|---|
| Section 80CCD(1) - Within 80C Limit | ₹ 0 | 10% of Salary (₹1.5 lakh max) | ₹ 0 |
| Section 80CCD(1B) - Additional NPS Benefit | ₹ 0 | ₹50,000 | ₹ 0 |
| Section 80CCD(2) - Employer Contribution | ₹ 0 | 10% of Salary | ₹ 0 |
| Total Annual Tax Saving | - | - | ₹ 0 |
Important Notes:
- At retirement, a minimum of 40% of the NPS corpus must be used to purchase an annuity.
- The remaining 60% can be withdrawn as a lump sum and is tax-free.
- Partial withdrawals are allowed after 3 years of joining NPS, up to 25% of the contribution for specific purposes.
- Tax benefits under Section 80CCD(1B) are available only for investments in NPS Tier I accounts.
- NPS Tier II accounts do not offer any direct tax benefits but provide complete liquidity.
NPS Guide & Tutorial
Understanding National Pension System (NPS)
The National Pension System (NPS) is a government-sponsored pension scheme that offers a systematic approach to retirement planning. It combines market-linked returns with tax benefits while ensuring a regular income post-retirement.
Key Benefits
- Market-linked returns
- Professional fund management
- Low cost of investment
- Flexible investment options
Important Considerations
- Long-term commitment required
- Partial withdrawal restrictions
- Mandatory annuity purchase
- Market risk exposure
NPS Account Types
Tier I Account
- Features:
- Mandatory retirement account
- Tax benefits available
- Restricted withdrawals
- Minimum contribution: ₹500/year
Tier II Account
- Features:
- Voluntary savings account
- No tax benefits
- Complete liquidity
- Minimum contribution: ₹250/year
Investment Options
| Asset Class | Description | Risk Level | Max Allocation |
|---|---|---|---|
| Equity (E) | Investment in stocks | High | 75% |
| Corporate Bonds (C) | Corporate debt securities | Medium | 100% |
| Government Securities (G) | Government bonds | Low | 100% |
| Alternative Investment (A) | REITs, InvITs, etc. | High | 5% |
Tax Benefits
Section 80CCD(1)
- Part of 80C limit
- Up to ₹1.5 lakh deduction
- For self-contribution
- 10% of salary for employees
Section 80CCD(1B)
- Additional deduction
- Up to ₹50,000
- Over 80C limit
- For self-contribution
Section 80CCD(2)
- Employer contribution
- Up to 10% of salary
- No monetary limit
- Additional benefit
How to Use the Calculator
Enter Personal Information
Input your current age and expected retirement age to determine the investment horizon.
Choose Investment Details
Select account type, contribution amounts, and annual increase in contribution.
Select Investment Strategy
Choose between Auto Choice (lifecycle fund) or Active Choice (custom allocation).
Review Results
Check projected corpus, tax benefits, and monthly pension estimates.
Frequently Asked Questions
At retirement (age 60):
- Mandatory Annuity:
- 40% of corpus for annuity
- Regular monthly pension
- Multiple annuity options
- Lump Sum:
- 60% can be withdrawn
- Tax-free withdrawal
- No restrictions on usage
Withdrawal options:
- Partial Withdrawal:
- After 3 years
- Up to 25% of contribution
- Maximum 3 times
- Specific purposes only
- Premature Exit:
- Before age 60
- 80% mandatory annuity
- 20% lump sum
Investment choices:
- Auto Choice:
- Age-based allocation
- Automatic rebalancing
- Three lifecycle funds
- Active Choice:
- Custom allocation
- Regular monitoring needed
- More control
Choose based on risk appetite and expertise.
Tax treatment at different stages:
- During Investment:
- EEE category
- Multiple tax benefits
- No tax on growth
- At Withdrawal:
- 60% lump sum tax-free
- Annuity taxable as income
- Death benefit tax-free
Optimization strategies:
- Investment Strategy:
- Start early
- Regular contributions
- Maximize tax benefits
- Asset Allocation:
- Age-appropriate mix
- Regular rebalancing
- Monitor performance
Review and adjust strategy periodically.