NPS Tax Benefit Calculator
See your total NPS deduction and tax saved live — 80CCD(1), 80CCD(1B) & 80CCD(2) across salaried, government & self-employed.
Deduction breakdown
| Section | Eligible deduction | Tax saved |
|---|
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We structure your NPS contributions for maximum deductions alongside every other section you qualify for.
Disclaimer: Indicative estimate. Tax saved uses your marginal slab rate plus 4% cess on the eligible NPS deduction. Actual benefit depends on total income, other deductions and rebate eligibility. Rates per Finance Act 2025.
The extra ₹50,000 under 80CCD(1B)
Section 80CCD(1B) gives NPS an edge no other investment has: a deduction of up to ₹50,000 that sits over and above the ₹1.5 lakh ceiling of Section 80C / 80CCD(1). For someone in the 30% slab, fully using this ₹50,000 saves ₹15,000 plus 4% cess — every year, just for parking money in your own retirement account.
Extra deduction
Claimable under 80CCD(1B) on your own NPS contribution, on top of the ₹1.5L 80C limit.
Within the ₹1.5L cap
Your contribution up to 10% of salary (20% of gross for self-employed) counts here — but shares the ₹1.5 lakh 80C ceiling.
Fill 1B first
The calculator claims the first ₹50,000 of your contribution under 80CCD(1B), then routes the rest to 80CCD(1) — the split that maximises your deduction.
Employer contribution — 80CCD(2) limits
When your employer contributes to your NPS, that amount is deductible under Section 80CCD(2) — separate from 80C and from your own 80CCD(1)/(1B) claims. The cap depends on who you work for: government employees get a higher 14% of salary, everyone else 10%. Self-employed individuals have no employer, so 80CCD(2) does not apply to them.
| Deduction limit | 14% of salary |
| Counts toward 80C ₹1.5L? | No |
| Available in new regime? | Yes |
| Deduction limit | 10% of salary |
| Counts toward 80C ₹1.5L? | No |
| Available in new regime? | Yes |
NPS in the new regime
The new tax regime removes most deductions — including your own 80CCD(1) and the ₹50,000 80CCD(1B). The one that survives is employer contribution under 80CCD(2), which remains fully deductible up to the 14% / 10% cap. So if you are on the new regime, the tax benefit of NPS comes almost entirely from what your employer puts in, not from what you contribute yourself.
- Enter your annual gross income and your own yearly NPS contribution.
- Choose employment type: salaried government, salaried private, or self-employed.
- Add the employer NPS contribution and select the Old or New Regime.
- Click Calculate to see the split across 80CCD(1), 80CCD(1B) and 80CCD(2) plus total tax saved.
What is the extra NPS deduction under 80CCD(1B)?
Section 80CCD(1B) gives an additional ₹50,000 deduction for your own NPS contribution, over and above the ₹1.5L limit of Section 80C. Together they allow up to ₹2L.
What tax deductions are available for NPS contributions?
Employee contributions to NPS are deductible: up to Rs 1.5 lakh under Section 80CCD(1) (part of the overall 80C limit), and an additional Rs 50,000 under Section 80CCD(1B) over and above the 80C limit. Employer contributions up to 10% of salary are deductible under Section 80CCD(2) with no cap.
Does NPS give any benefit in the New Regime?
Yes, but only the employer contribution under Section 80CCD(2). Your own contributions under 80CCD(1) and 80CCD(1B) are not deductible in the New Regime.
Is NPS contribution deductible under the new tax regime?
Under the new tax regime, Section 80CCD(1B) deduction (Rs 50,000) is not available. However, employer NPS contributions under Section 80CCD(2) remain deductible even under the new regime, making it valuable for salaried employees whose employer contributes to NPS.
What is the 80CCD(2) employer limit?
The employer NPS contribution is deductible up to 14% of salary for government employees and 10% for others. This deduction is available in both the Old and New Regimes.
What is the tax treatment on NPS maturity proceeds?
At maturity (age 60), 60% of the NPS corpus can be withdrawn tax-free. The remaining 40% must be used to purchase an annuity, which is taxable as income in the year of receipt. Partial withdrawals up to 25% of the employee's own contributions are tax-free after 3 years for specified purposes.
Is the NPS maturity amount tax-free?
On maturity at age 60, up to 60% of the corpus can be withdrawn tax-free. The remaining 40% must be used to buy an annuity, and the pension from it is taxable.
What is Tier I and Tier II NPS account?
Tier I is the mandatory pension account with lock-in until age 60 and tax benefits. Tier II is a voluntary savings account with no lock-in and free withdrawals but no tax deduction (except for government employees). The minimum contribution is Rs 500 per year for Tier I and Rs 250 for Tier II.
How much corpus can NPS generate by retirement?
Returns depend on the asset allocation and fund manager performance. Historically, NPS equity funds have returned around 10-12% CAGR. A monthly contribution of Rs 5,000 starting at age 30 could grow to approximately Rs 1.5-2 crore by age 60, though actual returns are not guaranteed.
Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.