What is the NPS Calculator?
The National Pension System (NPS) is a government-regulated, market-linked retirement scheme. You invest monthly until 60; at maturity at least 40% of the corpus has to be used to buy an annuity (monthly pension) and up to 60% can be withdrawn as a tax-free lump sum.
This calculator projects the corpus at 60, splits it into lump-sum and annuity portions, and estimates your monthly pension at a chosen annuity rate.
Formula
- P — Monthly NPS contribution
- i — Monthly expected return (annual return ÷ 12)
- n — Months until age 60
- Annuity rate — Insurer payout rate (typically 5.5–7% p.a.)
Step-by-step example
Setup: ₹5,000/month from age 30 to 60 at 10% expected return, 40% annuity at 6%.
- n = 360 · i = 0.00833
- Corpus ≈ ₹1.13 crore
- Lump sum (60%) ≈ ₹67.8 lakh · Annuity (40%) ≈ ₹45.2 lakh
- Monthly pension ≈ 45.2L × 6% ÷ 12 ≈ ₹22,600
Answer: Corpus ≈ ₹1.13 Cr · Lump sum ≈ ₹67.8L · Pension ≈ ₹22,600/month
Frequently asked questions
Is NPS tax-deductible?
Yes — an extra ₹50,000 under 80CCD(1B), over and above the ₹1.5L 80C limit. Employer contribution (up to 10% of basic) is also deductible.
Is the pension taxable?
Yes — the monthly annuity is added to your income and taxed at slab rate. The 60% lump sum is tax-free.
Can I exit before 60?
Yes, but only up to 20% can be taken as lump sum; the rest must be annuitized. Better treated as long-term.