NPS Calculator — National Pension Scheme 2026
Updated: 3 June 2026 | NPS Returns: 7–10% typical | Extra deduction: ₹50,000 under 80CCD(1B)
NPS (National Pension System) maturity corpus depends on your monthly contribution, expected return rate (historically 7–10% p.a.), and years invested. At age 60: minimum 40% of corpus must be used to buy an annuity (monthly pension); up to 60% can be withdrawn as a tax-free lump sum. Tax benefits: contributions up to ₹1.5L deductible under 80CCD(1) (within 80C limit); an additional ₹50,000 deductible under 80CCD(1B) (old regime only); employer's NPS contribution deductible under 80CCD(2) — available even in the new tax regime.
₹50,000
Extra deduction under Section 80CCD(1B) — old tax regime only.
Over and above the ₹1.5 lakh limit of Section 80C. Total NPS tax benefit can reach ₹2 lakh/year for salaried individuals.
Over and above the ₹1.5 lakh limit of Section 80C. Total NPS tax benefit can reach ₹2 lakh/year for salaried individuals.
NPS Maturity Calculator
NPS Tax Benefits — Summary
| Section | Who Can Claim | Limit | Old Regime | New Regime |
|---|---|---|---|---|
| 80CCD(1) | Employee / Self-employed | 10% of salary (employees); 20% of gross income (self-employed) — within overall ₹1.5L 80C limit | ✓ Available | ✗ Not available |
| 80CCD(1B) | All NPS subscribers | ₹50,000 — over and above 80C limit | ✓ Available | ✗ Not available |
| 80CCD(2) | Salaried employees (employer NPS contribution) | 14% of salary (central govt employees); 10% of salary (others) | ✓ Available | ✓ Available |
Note: "Salary" for NPS purposes = Basic + Dearness Allowance. The 80CCD(2) deduction under the new regime makes employer NPS one of the most tax-efficient benefits for salaried employees.
How NPS Works at Retirement
NPS matures at the age of 60. The total corpus accumulated over your investment period is split into two parts:
| Component | Percentage | Tax Treatment | Details |
|---|---|---|---|
| Lump Sum Withdrawal | Up to 60% | Fully tax-free | Can be withdrawn immediately at retirement. No tax payable. |
| Annuity Corpus | Minimum 40% | Corpus tax-free; pension taxable | Used to purchase annuity from PFRDA-empanelled insurer. Monthly pension received is taxable as income. |
You may choose to put more than 40% into the annuity for a higher monthly pension. The annuity rate typically ranges from 5.5% to 7.5% depending on the insurer and annuity option selected.
Frequently Asked Questions
What is NPS monthly pension after retirement?
The monthly pension (annuity) depends on the annuity corpus (minimum 40% of NPS maturity value) and the annuity rate offered by the PFRDA-empanelled insurance company you choose. At a typical annuity rate of 6% per annum, a corpus of ₹50 lakh would yield approximately ₹25,000/month. Rates vary by annuity option (life annuity, joint life, return of purchase price, etc.) and by insurer. You can get indicative quotes at the NPS Trust portal before retirement.
How is NPS maturity amount calculated?
NPS maturity amount is calculated using the compound interest formula for a systematic investment plan (SIP): M = P × [((1 + r/12)^(12t) − 1) / (r/12)] × (1 + r/12), where P is the monthly contribution, r is the expected annual return rate, and t is the investment tenure in years. The corpus at 60 is split: minimum 40% must be used to purchase an annuity, and up to 60% can be withdrawn as a tax-free lump sum.
Is NPS corpus taxable on withdrawal?
At maturity (age 60): the lump-sum withdrawal (up to 60% of corpus) is fully tax-free. The annuity corpus (minimum 40%) used to purchase an annuity is not taxed at purchase, but the monthly pension received is taxable as "income from salary" or "income from other sources" at your applicable slab rate. Premature exit before 60: 80% of corpus must be used for annuity; only 20% can be withdrawn (taxable). Death before 60: entire corpus paid to nominee, fully tax-free.
NPS vs PPF — which is better?
NPS offers a higher additional deduction (₹50,000 under 80CCD(1B) over and above 80C), market-linked returns (7–12% historically), and partial equity exposure for potentially higher growth. PPF offers guaranteed 7.1% returns, full EEE tax exemption on maturity, and no compulsion to buy annuity. Key difference: NPS forces minimum 40% into an annuity (pension); PPF gives full corpus tax-free. For pure retirement income with tax efficiency, NPS + PPF together is ideal. NPS is better for the extra ₹50K deduction; PPF for guaranteed tax-free corpus.
Can I withdraw NPS before age 60?
Partial withdrawal is allowed after 3 years of joining NPS — up to 25% of your own contributions (not employer's) for specific purposes: higher education/marriage of children, purchase/construction of house, critical illness treatment, skill development, or starting a business. You can make up to 3 partial withdrawals over the entire tenure. Full premature exit (before 60) after 10 years: 80% of corpus must go towards annuity purchase; only 20% is paid as lump sum (taxable). Before 10 years: 100% must go to annuity.
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