NPS Calculator — National Pension System Corpus Projection — FY 2026-27
Calculate your National Pension System (NPS) retirement corpus. NPS allows up to 14% of basic+DA as employer contribution (fully tax-deductible u/s 80CCD(2)) + 10% from employee (80C). Maturity at 60: mandatory 40% annuity purchase, 60% tax-free lumpsum. Expected returns 9-12% based on your equity/corporate/government bond mix.
Compute your numbers → SIP Calculator
Use the full SIP Calculator for interactive computation with your exact inputs. This page covers the specific context + rules for your query intent.
Key rules at a glance
- Tier 1: retirement account with tax benefit + 60 lock-in
- Tier 2: flexible withdrawal, no tax benefit
- 80CCD(1): ₹1.5L cap (part of overall 80C)
- 80CCD(1B): extra ₹50K exclusive to NPS
- 80CCD(2): employer contribution up to 14% of basic+DA
How NPS works
National Pension System is a long-term, government-backed retirement savings plan. You invest monthly in your PRAN (Permanent Retirement Account Number). Funds go to one of 8 Pension Fund Managers (SBI PFM, HDFC PFM, LIC PFM, etc.). You choose the equity-corporate-government allocation via Active Choice (you set %) or Auto Choice (lifecycle-based). At 60, you can withdraw 60% as tax-free lumpsum; 40% MUST be used to purchase an annuity from an IRDAI-licensed insurer.
NPS tax benefits — the strongest retirement instrument
Three layers of 80C-family deductions: (1) Section 80CCD(1): employee contribution up to ₹1.5L within the overall 80C cap. (2) Section 80CCD(1B): additional ₹50K exclusive to NPS — this is the most attractive benefit. (3) Section 80CCD(2): employer contribution up to 14% of basic+DA fully deductible (FROM TAXABLE INCOME) — no cap, over and above 80C. Combined: an employee with ₹10L basic can potentially deduct ₹1.5L + ₹50K + ₹1.4L = ₹3.4L via NPS alone.
NPS expected returns
Historical returns (10-year average as of FY 2026-27): Equity (E): 11-13% CAGR. Corporate Bond (C): 8-10%. Government Bond (G): 7-9%. Alternate (A): 9-11% (only in Active Choice). Auto Choice blended return: 9-11% depending on your age (more equity when young, more bond closer to 60). Aggressive (75% equity cap): ~11%. Moderate (50% equity): ~10%. Conservative (25% equity): ~9%.
NPS vs UPS vs EPF — which to pick?
EPF: mandatory for salaried; 8.25% return, EEE tax, easy withdrawal pre-60 for specific reasons. NPS: voluntary (or mandatory for Central Govt new joiners pre-UPS); market-linked returns (9-12%), partial tax on 40% annuity, exit post-60. UPS: Central Govt only, guaranteed 50% pension of last 12 months basic, replaces NPS for eligible opt-ins. Rule of thumb: EPF as floor (automatic), NPS as growth-oriented supplement for tax savings + equity exposure, UPS (if eligible) for guaranteed pension.
NPS Calculator — FAQ
What is the NPS tax benefit?
Up to ₹2L annual deduction under old regime: ₹1.5L via Section 80CCD(1) (part of overall 80C cap) + ₹50K exclusive Section 80CCD(1B). Additionally, employer contribution up to 14% of basic+DA is separately deductible under Section 80CCD(2) — no cap. NEW regime forfeits 80CCD(1) and 80CCD(1B) but KEEPS 80CCD(2). For salaried in 30% bracket, NPS saves ₹60-80K tax annually.
What return does NPS give?
Market-linked, depending on asset mix. 10-year historical averages: Equity 11-13%, Corporate Bond 8-10%, Government Bond 7-9%. Aggressive lifecycle (75E/10C/10G/5A): ~11%. Moderate (50E/25C/25G): ~10%. Safe (25E/25C/50G): ~9%. NPS typically outperforms PPF (7.1%) and EPF (8.25%) over 20+ year horizons due to equity exposure.
Can I withdraw NPS before 60?
Partial withdrawal allowed after 10 years in specific cases: child marriage/education, serious illness, home purchase, disability. Limit: up to 25% of your OWN contribution (not employer), max 3 times in account tenure. Full withdrawal pre-60 requires purchase of annuity from 80% of corpus (only 20% lumpsum) — designed to discourage early exit. Post-60: 60% lumpsum tax-free, 40% mandatory annuity.
What is Tier 1 vs Tier 2 NPS?
Tier 1: retirement account with tax benefits, 60-year lock-in with partial withdrawal rules. Opening required for NPS enrollment. Tier 2: voluntary savings account, no tax benefit, fully liquid (withdraw anytime). Same fund managers and investment options. Tier 2 is rarely worth opening — mutual funds offer similar liquidity + similar returns without the NPS paperwork.
How is NPS annuity taxed?
Annuity purchase itself is tax-free at exit. But the monthly pension received from annuity IS taxable at slab rate under "Salary / Pension" income head. This is why NPS is semi-EEE, not fully EEE like PPF. Effective tax rate on annuity depends on your post-retirement income — seniors with low total income may pay minimal tax.
What is the minimum NPS contribution?
Tier 1: ₹500 per contribution, minimum ₹1,000/year to keep account active. Tier 2: ₹250 minimum. Contributions can be made online via eNPS portal, mobile banking, or directly at Points of Presence (POPs — banks, insurance offices). No maximum cap — tax deduction is capped at the Section limits, but you can contribute more without deduction.
How much NPS corpus will I have at 60?
Starting at 30 with ₹5K/month (employee) + ₹7K/month (employer 14% of ₹50K basic) = ₹12K/month. At 10% return for 30 years, corpus ≈ ₹2.74 crore. 60% lumpsum tax-free = ₹1.64 crore. 40% annuity = ₹1.10 crore; at 6% annuity rate, monthly pension ~₹55,000. Adjust for your specific salary + contribution rate.
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