NPS Tax Benefit Calculator
Calculate your National Pension System deductions under 80CCD(1), 80CCD(1B) and 80CCD(2), and project your retirement corpus — live, in seconds.
NPS deduction & tax-saving breakdown
NPS corpus & maturity split
NPS tax benefits explained
The National Pension System (NPS) is one of the most tax-efficient retirement products in India. It offers deductions under three separate sections — 80CCD(1), 80CCD(1B) and 80CCD(2) — that together can shelter a large chunk of your salary from tax, plus a market-linked corpus that grows tax-free until retirement.
The three 80CCD sections
Section 80CCD(1)
Your own NPS contribution, deductible up to 10% of salary (Basic + DA) for salaried employees — but it sits inside the ₹1.5 lakh 80C ceiling shared with PPF, ELSS, LIC, EPF etc. Only available in the old regime.
Section 80CCD(1B)
An exclusive additional ₹50,000 deduction for NPS, over and above the ₹1.5L 80C limit. This is the single biggest reason to hold NPS — no other product offers it. Old regime only.
Section 80CCD(2)
Deduction for your employer's NPS contribution, capped at 10% of salary for private employees and 14% for central government employees. Uniquely, this deduction is available in both the old and new tax regimes.
Maturity taxation
At 60, up to 60% of the corpus is withdrawn tax-free as a lump sum. The remaining 40% must be used to buy an annuity, and the monthly pension you receive is taxed as income in that year.
Why NPS builds a large corpus
Because contributions compound monthly at an equity-linked return of 10–12% p.a. over decades, even a modest ₹10,000/month can grow into a multi-crore corpus by retirement. Use the NPS Corpus tab above to project yours for any contribution, tenure and return assumption, and see the 60/40 tax-free lump-sum vs annuity split.