NPS calculator
Your corpus at retirement, how much of it you are actually allowed to take as a lump sum, the pension the rest buys, and what the whole thing saved you in tax.
NPS calculator
Corpus at retirement, the split you are actually allowed, and what the annuity pays
60 is the normal exit age.
₹4,167 a month is the amount that exactly uses the separate ₹50,000 deduction under 80CCD(1B).
Only if you have corporate NPS. It grows your corpus but is not your deduction.
Raising the contribution with your salary is where most of the difference comes from.
Nobody knows what rate a provider will quote decades from now, so this is yours to set. Move it and watch the pension figure move — that sensitivity is the honest headline.
For the tax-saved figure.
Corpus at 60
₹90.53 lakh
₹90,52,589
₹18,00,000 contributed, ₹72,52,589 of growth on top, over 30 years at a blended 9.30%.
Lump sum you can take
₹72,42,071
80% of the corpus
Must buy an annuity with
₹18,10,518
20% of the corpus — the statutory minimum
Non-government sector, corpus above ₹12 lakh — at least 20% must be annuitised, not the 40% almost every calculator applies.
Monthly pension, at a 6% annuity rate
₹9,053
The annuity rate is your assumption, not a quote. The real rate is whatever a provider offers on the day you retire, which is why this figure moves so much when you change it.
₹18,10,518 of your lump sum sits outside the exemption
The exit rules let you take 80 per cent of the corpus as a lump sum, but the income-tax exemption on an NPS lump sum stops at 60 per cent. Taking the maximum is allowed; it is not all tax-free. Almost no calculator surfaces this, because almost none applies the correct exit split in the first place.
₹5,40,000 of income tax saved along the way, on a deduction of ₹60,000 a year at 30 per cent for 30 years. The deduction is capped at ₹1,50,000 under section 80CCE plus a separate ₹50,000 under 80CCD(1B), so contributing more than ₹16667 a month buys corpus but no further deduction.
Show the working
- 1Years to retirement30
- 2Blended return from your allocation9.30% a year
A weighted average of your equity, corporate bond and government securities split, using 11%, 8% and 7% respectively. These are assumptions, not promises.
- 3Total contributed over the period₹18,00,000
- 4Growth on top₹72,52,589
Compounding does 403% more work than your contributions over 30 years.
- 5Corpus at retirement₹90,52,589
- 6Minimum that must be annuitised₹18,10,518 (20%)
Non-government sector, corpus above ₹12 lakh — at least 20% must be annuitised, not the 40% almost every calculator applies.
- 7Available as a lump sum₹72,42,071
- 8Lump sum beyond the 60% exemption₹18,10,518
The exit rules let you take more than 60% of the corpus, but the income-tax exemption on a lump sum stops at 60%. This part is not covered by it.
- 9Monthly pension at 6% annuity rate₹9,053
The annuity amount times the rate you assumed, divided by twelve. The real rate is whatever a provider quotes on the day you retire.
- 10Income tax saved along the way₹5,40,000
A deduction of ₹60,000 a year at 30%, for 30 years.
Returns are your own assumptions applied to your own allocation; nothing here is a promise or a projection anyone is standing behind. The exit split follows the banded rules in the NPS exit regulations rather than the flat 60/40 most calculators apply.
Comparing NPS against a guaranteed government pension? Atal Pension Yojana pays a fixed amount instead
Your employer's NPS contribution is deductible at a higher rate under the new tax regime. See what that does to your take-home
Key takeaways
- →NPS is not a flat 60/40. The exit rules are banded: everything up to ₹8 lakh with no annuity at all, a capped ₹6 lakh lump sum between ₹8 lakh and ₹12 lakh, and above that 20% annuitised for a non-government subscriber or 40% for a government one.
- →The familiar 60% is a TAX limit, not a withdrawal limit — section 10(12A) exempts a lump sum up to 60% of the corpus. Above ₹12 lakh the two limits do not line up.
- →Leaving before 60 is the expensive case: above ₹5 lakh, 80% of the corpus must be annuitised.
- →The genuinely additional tax break is the ₹50,000 under 80CCD(1B). Contributions inside the ₹1,50,000 80CCE ceiling are competing with your provident fund and insurance for the same space.
- →Tier II carries no tax benefit at all for a non-government subscriber.
- →The annuity rate is unknowable decades out, so it is an input here rather than a constant. Its sensitivity is the honest headline.
- →The projection responds far more to the number of years than to the rate. The decision that matters is when you start.
The 60/40 rule is not the rule
Almost every article and calculator about NPS says the same thing: at 60 you take 60 per cent of your corpus as a lump sum and must buy an annuity with the other 40. It is the most repeated sentence in Indian retirement content, and it describes one band of one sector's rules.
The actual withdrawal rules are a staircase, and they depend on how big your corpus is. A corpus at or under ₹8 lakh can be taken in full, with no annuity requirement whatsoever. Between ₹8 lakh and ₹12 lakh the lump sum is capped at ₹6 lakh, with the balance annuitised or paid out periodically over at least six years. Only above ₹12 lakh does a percentage rule bite — and it is 20 per cent for a non-government subscriber, which is to say for most readers of this page. The 40 per cent figure is the government sector rule.
So where does 60 come from? From the tax code, not the exit rules. Section 10(12A) exempts a lump-sum withdrawal of up to 60 per cent of the accumulated corpus. Two different limits, from two different instruments, that happen to be adjacent numbers — and above ₹12 lakh they come apart. A non-government subscriber may withdraw 80 per cent while the exemption covers 60 per cent, so taking the maximum permitted is allowed and is not entirely tax-free. The calculator above flags that gap when it arises, which as far as we can tell no other NPS calculator does — because none of them applies the correct split to begin with.
| Situation | Corpus | Minimum annuitised | Lump sum available |
|---|---|---|---|
| Normal exit | At or under ₹8 lakh | Nothing | The whole corpus |
| Normal exit | ₹8 lakh to ₹12 lakh | The balance after a ₹6 lakh lump sum, annuitised or paid out over at least six years | Up to ₹6 lakh |
| Normal exit, non-government | Above ₹12 lakh | 20% | 80% |
| Normal exit, government | Above ₹12 lakh | 40% — the source of the familiar 60/40 | 60% |
| Joined at or after 60 | At or under ₹12 lakh | Nothing | The whole corpus |
| Premature exit | At or under ₹5 lakh | Nothing | The whole corpus |
| Premature exit | Above ₹5 lakh | 80% | 20% |
| Tax exemption on the lump sum | Any | — | Exempt up to 60% of the corpus under s.10(12A) — a separate limit from the rows above |
The takeaway: the last row is the one to read twice. Everything above it is about what you are permitted to withdraw; the last row is about what is tax-free. They are different numbers set by different instruments, and conflating them is how a retirement plan ends up short.
Normal exit. The rule is a staircase banded at ₹8 lakh and ₹12 lakh, not the flat 60/40 almost every NPS calculator applies — and above ₹12 lakh it differs by sector.
The takeaway: two things here are the opposite of what the standard explanation says. A small corpus is more flexible, not less — up to ₹8 lakh there is no annuity requirement at all, and the one awkward band is the middle one, where a corpus just over ₹8 lakh leaves you a smaller share as a lump sum than a corpus just under it. And at the top end a non-government subscriber may take 80 per cent as a lump sum while the income-tax exemption covers only 60 — so the maximum permitted withdrawal is not the maximum tax-free withdrawal, and nobody tells you that because nobody applies the right split in the first place.
View the figures as a table
| Corpus | Non-government lump sum | As a share | Government, as a share | Band |
|---|---|---|---|---|
| ₹4,00,000 | ₹4,00,000 | 100% | 100% | No annuity required |
| ₹8,00,000 | ₹8,00,000 | 100% | 100% | No annuity required |
| ₹8,50,000 | ₹6,00,000 | 71% | 71% | Lump sum capped at ₹6 lakh |
| ₹10,00,000 | ₹6,00,000 | 60% | 60% | Lump sum capped at ₹6 lakh |
| ₹12,00,000 | ₹6,00,000 | 50% | 50% | Lump sum capped at ₹6 lakh |
| ₹12,50,000 | ₹10,00,000 | 80% | 60% | Minimum annuitisation applies |
| ₹20,00,000 | ₹16,00,000 | 80% | 60% | Minimum annuitisation applies |
| ₹40,00,000 | ₹32,00,000 | 80% | 60% | Minimum annuitisation applies |
| ₹80,00,000 | ₹64,00,000 | 80% | 60% | Minimum annuitisation applies |
Starting at 30 and retiring at 60, on a 50/30/20 equity, corporate bond and government securities split — a blended 9.30 per cent a year. The return assumptions are ours and are stated on the calculator; they are a projection device, not a forecast.
The takeaway: at ₹10,000 a month for thirty years you contribute ₹36,00,000 and end with ₹1,81,05,177 — so roughly 80 per cent of the final corpus is growth rather than contribution. That ratio is almost entirely a function of TIME, not of the amount: the same monthly contribution started ten years later produces a dramatically smaller corpus, and no later increase in contributions makes up for it. If you are going to do one thing about NPS, start it rather than optimise it.
View the figures as a table
| Monthly contribution | Total contributed | Corpus at 60 | Growth | Growth as a share |
|---|---|---|---|---|
| ₹2,000 | ₹7,20,000 | ₹36,21,035 | ₹29,01,035 | 80% |
| ₹5,000 | ₹18,00,000 | ₹90,52,589 | ₹72,52,589 | 80% |
| ₹10,000 | ₹36,00,000 | ₹1,81,05,177 | ₹1,45,05,177 | 80% |
Tier I against Tier II
| Tier I | Tier II | |
|---|---|---|
| What it is | The pension account. The reason NPS exists. | A voluntary savings account alongside it. |
| Tax deduction on contributions | Yes — 80CCD(1) within the ₹1,50,000 ceiling, plus ₹50,000 under 80CCD(1B). | None for a non-government subscriber. |
| Tax on gains | Deferred. The lump sum is largely exempt; the annuity income is taxed. | Taxed at your marginal rate. No special treatment. |
| Withdrawal | Restricted. Partial withdrawal is permitted; a full exit follows the banded rules above. | Unrestricted. Withdraw whenever you like. |
| Compulsory annuity | Yes, above the corpus thresholds. | No. |
| Can you open it alone? | Yes. | No — a Tier I account is a prerequisite. |
| Who it suits | Anyone using the 80CCD(1B) deduction and willing to accept annuitisation. | Hard to justify for a private-sector subscriber: the flexibility is real but the tax case is absent. |
The takeaway: Tier II is the part of NPS that is easiest to mis-sell, because it sounds like NPS and shares none of its advantages. For a non-government subscriber it is a low-cost fund wrapper with no deduction and no concessional treatment of gains.
The asset classes, and choosing between active and auto
NPS invests across asset classes, and you choose how. Active choice means you set the split and change it when you want. Auto choice puts you in a lifecycle fund that starts equity-heavy and shifts into bonds and government securities as you age, without you doing anything.
Neither is better in the abstract, and the honest comparison is about behaviour rather than returns. Auto choice removes the risk that you forget to de-risk in the five years before you retire — a real risk, and an expensive one if a market falls just before you annuitise. Active choice is better only if you will actually review it.
The scheme-level limits on how much equity you may hold are set by the regulator and by your pension fund's scheme documents, and this page deliberately does not quote a figure for them: we were not able to read the current limits off a government source in this pass, and an out-of-date cap is worse than no cap. Check your own scheme before assuming you can hold a given equity share.
| Class | What it holds | Risk | Role in a mix |
|---|---|---|---|
| E — Equity | Listed shares. | Highest. Can fall sharply in any given year. | The reason to use NPS rather than only a provident fund. Needs decades to work. |
| C — Corporate bonds | Debt issued by companies. | Moderate. Credit risk and interest-rate risk. | The middle of the portfolio. Higher yield than government paper, more risk. |
| G — Government securities | Central and State government debt. | Lowest credit risk, but still interest-rate risk. | The ballast. What a lifecycle fund shifts you into as you age. |
| A — Alternative investments | Instruments such as REITs, InvITs and asset-backed securities. | Highest and least liquid. | A small satellite allocation at most, and only under active choice. |
The takeaway: the blended return moves less than people expect when you shuffle the mix, because the three main classes are not that far apart. The variable that dominates the projection is the number of years, which the next section makes uncomfortably clear.
The cost of starting late — three worked examples
The same contribution, the same allocation, the same retirement age. Only the starting age differs. Every figure is produced by the calculator at the top of this page.
| Start age | Years | Total contributed | Corpus at 60 | Growth | Monthly pension |
|---|---|---|---|---|---|
| 25 | 35 | ₹21,00,000 | ₹1,44,99,297 | ₹1,23,99,297 | ₹14,499 |
| 35 | 25 | ₹15,00,000 | ₹55,60,917 | ₹40,60,917 | ₹5,561 |
| 45 | 15 | ₹9,00,000 | ₹18,87,611 | ₹9,87,611 | ₹1,888 |
The takeaway: starting at 25 rather than 35 costs −₹6,00,000 more in contributions — ten extra years of ₹5,000 a month — and produces ₹89,38,380 more corpus. The extra decade is worth several times what it costs, and nothing you do later recovers it. If you take one decision from this page, it is to start.
At 25: ₹1,44,99,297 at 60
Thirty-five years of ₹5,000 a month. Contributions come to ₹21,00,000, and growth accounts for 86 per cent of the final corpus. Comfortably above the ₹12 lakh band, so 20 per cent must be annuitised — leaving ₹1,15,99,438 as a lump sum, of which ₹28,99,859 sits outside the 60 per cent exemption.
At 35: ₹55,60,917 at 60
Twenty-five years. Ten fewer years of contributions reduces the corpus by ₹89,38,380 — far more than the −₹6,00,000 of contributions that were skipped, because the missing years are the earliest ones and therefore the ones that compound longest.
At 45: ₹18,87,611 at 60
Fifteen years. Growth is now only 52 per cent of the corpus against 86 per cent for the 25-year-old: at this horizon NPS behaves much more like a savings account than like a compounding engine, and the case for it rests on the tax deduction rather than on the growth. That is a legitimate reason to use it — just a different one.
NPS against EPF and PPF
| NPS Tier I | EPF | PPF | |
|---|---|---|---|
| Return | Market-linked, from your own asset mix. | A declared rate — currently 8.25%. | A declared rate, reset periodically. |
| Equity exposure | Yes, and it is the main reason to use it. | Indirect and small. | None. |
| Is it optional? | Yes. | No, for a covered employee — and the wage ceiling is now ₹25,000 a month. | Yes. |
| Compulsory annuity on exit | Yes, above the corpus thresholds. | No. The whole balance is payable. | No. |
| Deduction | 80CCD(1) within the ₹1,50,000 ceiling, plus a separate ₹50,000 under 80CCD(1B). | Inside the ₹1,50,000 ceiling. | Inside the ₹1,50,000 ceiling. |
| Liquidity before retirement | Partial withdrawal permitted; a full early exit is punitive. | Advances available; a full settlement needs twelve months out of covered work. | Partial withdrawal after a qualifying period. |
| Tax on the payout | Lump sum largely exempt; the annuity income is taxable every year. | Exempt after five years of continuous service. | Exempt. |
The takeaway: the comparison most people make — which gives the highest return — is the least useful one, because provident fund is not optional and the three are not substitutes. The real question is narrower: is the extra ₹50,000 deduction plus genuine equity exposure worth accepting compulsory annuitisation? For a long horizon, usually yes. For someone who may need the money at 50, usually not.
Working out what your provident fund is doing instead? The PF withdrawal rules changed substantially under the 2026 Scheme.
Who NPS suits, and who it does not
It probably suits you if
- ·You are a long way from 60 and will not need the money before then.
- ·You have already used the ₹1,50,000 ceiling on things you wanted anyway, so the ₹50,000 under 80CCD(1B) is genuinely additional.
- ·You want equity exposure inside a retirement wrapper rather than alongside it.
- ·Your employer contributes, which is deductible at a higher rate under the new regime.
- ·You would rather be forced into a pension than trust yourself to draw down a lump sum.
Think twice if
- ·You may need the money before 60 — a premature exit annuitises 80% of it.
- ·You have not yet filled the ₹1,50,000 ceiling, in which case NPS inside it buys you no extra deduction.
- ·You object to compulsory annuitisation, because above the thresholds you cannot opt out.
- ·You are within ten years of retiring, where the tax deduction rather than growth is the whole case.
- ·You were sold Tier II as a tax-saving product. It is not one.
Frequently asked questions
How is the NPS pension calculated?
Is NPS really 60 per cent lump sum and 40 per cent annuity?
What happens if I exit NPS before 60?
What is the difference between NPS Tier I and Tier II?
How much tax do I actually save with NPS?
Is NPS better than EPF?
What return should I assume for NPS?
What is active choice and auto choice?
Can I withdraw from NPS before retirement without exiting?
Is the NPS pension taxable?
Who should not use NPS?
When can I exit NPS normally?
Does the calculator include the employer's contribution?
How much do I need to contribute to NPS every month?
Next
What to do next
- 1
Check which exit band your projected corpus falls into
It changes how much you can take and whether any of it is outside the tax exemption — and it is not the 60/40 you were probably told.
- 2
Decide whether you are using NPS for the deduction or for the equity
If it is the deduction, the useful amount is the one that fills 80CCD(1B). If it is the equity, the useful decision is to start earlier rather than contribute more.
See what the contribution does to your take-home - 3
Compare it against the guaranteed alternative
Atal Pension Yojana pays a fixed amount for a fixed contribution, with no market risk and no annuity decision at the end.
Atal Pension Yojana
Related tools
Sources for the figures on this page
Income-tax deductions available on NPS contributions
NPS Trust, "Tax Benefits under NPS" (page last updated 13 October 2026): employee contribution deductible up to 10% of salary (Basic + DA) under s.80CCD(1) within the overall Rs 1.50 lakh ceiling under s.80CCE; an additional Rs 50,000 under s.80CCD(1B) over and above that ceiling; employer contribution deductible under s.80CCD(2) up to 10% of salary for employees under the old tax regime and 14% of salary under the new tax regime; 20% of gross income under s.80CCD(1) for the self-employed. No tax benefit is available on Tier II contributions for non-government subscribers. NOTE: the NPS Trust page states these against Income-tax Act 1961 section numbers, which the Income-tax Act 2025 has renumbered; the limits are the authority here, not the numbering.
View sourceChecked 2026-10-14
How much of an NPS corpus must be annuitised on exit — banded by corpus size and different for government and non-government subscribers
NPS Trust, Normal Exit and Pre-Mature Exit pages. Normal exit, non-government sector (All Citizen subscribers eligible on completing 15 years of subscription or attaining 60, whichever is earlier): "If APW ≤ ₹8 Lakh: Entire APW can be withdrawn as lump sum or the subscriber can avail periodic payouts in the form of SLW or SUR. If ₹8 Lakh < APW ≤ ₹12 Lakh: The subscriber will have an option to withdraw up to ₹6 lakh in lump sum ... The balance APW shall be utilized for purchase of Annuity or for availing periodic payouts in the form of SUR for at least 6 years. If APW > ₹12 Lakh: At least 20% of the APW shall be mandatorily utilized for purchase of Annuity". Government sector is identical except that above ₹12 lakh "At least 40% of the APW has to be mandatorily utilized for purchase of Annuity". Subscribers joining at or after 60: entire APW up to ₹12 lakh, at least 20% annuitised above it. Premature exit (before 60, or under 15 years of subscription): "If the APW ≤ ₹5 lakh: Entire APW can be withdrawn as lump sum ... If the APW > ₹5 lakh: At least 80% of the APW has to be mandatorily utilized for purchase of Annuity".
View sourceChecked 2026-10-14
How an NPS corpus is taxed on exit — the source of the widely quoted 60/40, which is a TAX limit and not the withdrawal rule
NPS Trust, "Tax Benefits under NPS" (last updated 13 October 2026): exemption on lump-sum withdrawal of 60% of accumulated pension wealth on attaining 60 or superannuation under s.10(12A); exemption on the amount applied to purchase an annuity under s.80CCD(5); the annuity income received in later years is taxable under s.80CCD(3) at the subscriber's slab rate. Partial withdrawal is exempt up to 25% of the subscriber's own contribution under s.10(12B), on terms specified by PFRDA. NOTE: the NPS Trust page states these against Income-tax Act 1961 numbering, which the Income-tax Act 2025 has renumbered.
View sourceChecked 2026-10-14
What changed
14 October 2026 — first published.The exit split is taken from the NPS Trust's own Normal Exit and Pre-Mature Exit pages and is banded by corpus size, not the flat 60/40 that almost all NPS content states; the deduction limits and the tax treatment at each stage are from the NPS Trust's tax-benefits page, last updated 13 October 2026. Two things are deliberately absent: the regulator's scheme-level equity allocation limits, and any return figure presented as a forecast. The return assumptions on the calculator are stated as assumptions and are the reader's to change.
Written and reviewed by Deepak Middha, Chartered Accountant (ICAI, India) and founder of LayoffNext.
Founder of LayoffNext. Chartered Accountant and finance educator who builds free tools for people navigating layoffs.