NPS Calculator

Plan your retirement with the National Pension System — calculate corpus at 60, monthly pension, and your total tax savings across Sections 80CCD(1), 80CCD(1B), and 80CCD(2).

🏦 NPS Calculator

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Monthly Contribution ₹ Tier I minimum ₹500/month

Current Age (years)

Expected Annual Return (%) Equity ~10–12%, Balanced ~9%, Conservative ~8%

Annuity Rate (%) Rate pension company pays on annuity corpus

NPS in 2026 — What Every Subscriber Must Know

The National Pension System (NPS) has evolved significantly. The major 2025-26 change: non-government subscribers with corpus above ₹12 lakh can now withdraw up to 80% as lump sum at retirement (PFRDA notification, December 2025), needing only 20% for annuity — a major improvement from the older 60-40 rule. Government employees still follow 60% lump sum / 40% annuity.

The ₹2 Lakh Tax Deduction Roadmap

NPS is the only investment that gives up to ₹2 lakh in deductions under three separate sections (old tax regime):

Section	Amount	Who Can Claim
80CCD(1) — within 80C	Up to ₹1.5 lakh	All NPS investors (10% of salary for salaried, 20% of gross income for self-employed)
80CCD(1B) — exclusive NPS	Additional ₹50,000	All NPS Tier I investors — this is OVER AND ABOVE 80C ₹1.5L
80CCD(2) — employer contribution	Up to 10% of basic+DA	Salaried only — employer's NPS contribution (no upper cap in new regime too)

For a person in the 30% tax bracket, the ₹50,000 under 80CCD(1B) alone saves ₹15,600 in tax annually. Over 20 years, that's ₹3.12 lakh in direct tax savings.

NPS Tier 1 vs Tier 2 — The Critical Difference

Tier 1 is the pension account: lock-in until age 60, tax deduction on contributions, tax-exempt on 60% lump-sum withdrawal. Tier 2 is voluntary savings: no lock-in, no tax benefit for non-government employees, but government employees with 3-year lock-in can claim 80C deduction. Most investors should prioritise Tier 1 to maximise tax benefits before using Tier 2.

NPS Withdrawal Strategy — New Rules 2026

At 60: withdraw up to 80% lump sum (60% tax-free; additional 20% taxable at slab)
Buy annuity with minimum 20% corpus (exempt at purchase, monthly pension taxable)
Can defer until age 75 if needed
NPS Vatsalya (launched 2024): parents can open NPS accounts for minor children — corpus transfers to child's Tier I account at 18

Frequently Asked Questions

Is NPS better than PPF for retirement?

NPS offers higher return potential (equity allocation) and ₹50,000 extra deduction beyond 80C. PPF is fully tax-free at withdrawal while NPS pension is taxable. Ideal strategy: use PPF for the safe floor and NPS for the growth component — they complement each other.

Can I contribute to NPS and PPF simultaneously?

Yes. Both serve different purposes and the tax benefits stack. NPS gives the extra ₹50,000 under 80CCD(1B); PPF contributes to the ₹1.5L under 80C. Smart investors use PPF for guaranteed debt allocation and NPS equity for growth.

What is the annuity rate and can I change it later?

Annuity rate depends on which Life Insurance company you choose from PFRDA's empanelled list at retirement. Rates range 5.5–7.5% in 2026. You lock in the rate at retirement — it cannot be changed. Compare all empanelled providers before purchasing.