NPS Calculator
The National Pension System is India's market-linked retirement account — part mutual fund, part pension, with tax perks no other instrument offers. Project your corpus and see the lump-sum vs pension split.
Your inputs
Corpus growth over time
At retirement: lump sum vs annuity
Year-by-year breakdown
| Year | Contributions | Growth | Corpus |
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What is NPS?
The National Pension System is a voluntary, market-linked retirement scheme regulated by the PFRDA and open to Indian citizens aged 18 to 70. Your money is invested across equity, corporate bonds, government securities, and alternative assets by pension fund managers you choose. There are two accounts: Tier I is the main pension account — locked until age 60, with all the tax benefits — and Tier II is an optional no-lock-in add-on without the tax perks.
Unlike EPF and PPF, NPS has no fixed interest rate: returns follow the markets. Balanced Tier I portfolios have delivered roughly 9–10% annualised over long stretches, with equity-heavy allocations higher and bumpier. That market link is both the opportunity and the risk.
The math behind this calculator
Contributions compound monthly at your expected return, exactly like a SIP. At retirement the corpus splits: up to 60% comes to you as a tax-free lump sum, and at least 40% must purchase an annuity — a monthly pension, which is taxed as income when received.
Lump sum = (100% − annuity%) × corpus · Monthly pension ≈ annuity corpus × 7% ÷ 12
Worked example
Contribute ₹10,000 a month for 30 years at 10%. You put in ₹36 lakh; the corpus grows to roughly ₹2.26 crore. At 60, you take about ₹1.36 crore tax-free and the remaining ₹90.4 lakh buys an annuity paying an estimated ₹52,700 a month (at a 7% annuity rate). And if you use the old tax regime, the ₹50,000 exclusive NPS deduction under 80CCD(1B) alone saves a 30%-bracket earner about ₹15,600 in tax every year.
Caveats worth knowing
- Returns are not guaranteed. 10% is a planning assumption, not a promise — test 8% too, and remember fund-manager performance varies.
- The pension estimate is illustrative. Annuity rates at your retirement depend on prevailing interest rates and your age; 7% is a reasonable guess, not a quote.
- Tax benefits are regime-dependent. The 80CCD(1)/80CCD(1B) deductions need the old regime; only the employer-contribution deduction (80CCD(2), up to 14%) survives in the new regime.
- Your money is locked till 60. Partial withdrawals are allowed only three times, up to 25% of your own contributions, for specified reasons.
- Small corpuses get simpler treatment. If your total corpus at 60 is ₹5 lakh or less, you can withdraw it all as a lump sum with no mandatory annuity.
Sources: ET Money — NPS Tier I & II returns; Kotak — NPS interest rates and return range; Ganak — NPS tax benefits under 80CCD; Finclar — 80CCD(2) employer NPS deduction.