NPS Calculator

What is NPS and who should invest?

National Pension System is a voluntary, defined-contribution retirement scheme regulated by PFRDA. It is available to all Indian citizens aged 18–70. NPS is particularly suited to salaried professionals and self-employed who want a disciplined retirement corpus with significant tax benefits beyond Section 80C.

What are the tax benefits of NPS?

NPS offers three layers of tax deduction: ₹1.5 lakh under Sec 80C (combined with other 80C investments), an additional ₹50,000 under Sec 80CCD(1B) — exclusive to NPS, and employer contribution up to 10% of salary under Sec 80CCD(2) with no upper limit. Total potential deduction: over ₹2 lakh for salaried individuals.

How is NPS corpus distributed at retirement?

At retirement (age 60), you must use at least 40% of the corpus to buy an annuity (monthly pension). The remaining 60% can be withdrawn as a lump sum, which is completely tax-free. Choosing a higher annuity rate gives more monthly pension but reduces the lump sum.

What returns can I expect from NPS?

NPS returns depend on the asset allocation between Equity (E), Corporate Bonds (C), and Government Securities (G). Historical returns: Equity funds 10–14% CAGR over 10 years, Corporate bonds 8–10%, Government securities 7–9%. Auto-choice (LC-75) gradually shifts to lower-risk assets as you approach retirement.

Can I withdraw from NPS before retirement?

Partial withdrawal (up to 25% of self-contribution) is allowed after 3 years for specific purposes: higher education, marriage, house purchase, or critical illness. Full premature exit is allowed after 10 years, but 80% of the corpus must be used for annuity purchase.