Your contributions
Investment choice and expected return
Employer contribution (corporate NPS)
At exit: lump sum and annuity
Tax saving this year (rough guide)
Your NPS at retirement
NPS corpus by year
Year-wise breakdown
How the NPS calculator works
Each month your contribution (and your employer's, if any) is added to the corpus, which then grows at the monthly equivalent of the yearly return you choose. Your contribution goes up by the step-up percentage once a year. At the exit age the corpus is split: the annuity share buys a lifelong pension from an insurer, and the rest can be taken as a lump sum. Monthly pension = annuity amount × annuity rate ÷ 12.
With Auto choice the calculator reduces the equity share each year after 35 (45 for the Balanced fund) down to the age-55 level, and blends the equity, corporate bond and government securities returns you enter. With Active choice you set the mix yourself; equity is capped at 75% and the cap steps down by 2.5 points a year from age 50 to 50% at 60.
Comparing options? NPS sits alongside EPF (fixed 8.25% rate, salaried), PPF (7.1%, fully tax-free) and mutual fund SIPs (no lock-in). For retirement income from a mutual fund corpus instead of an annuity, see the SWP calculator.
How much can you withdraw at 60? (2026 rules)
PFRDA changed the exit rules in December 2025. For normal exit (60, or retirement):
| Sector | Lump sum | Annuity | Small corpus |
|---|---|---|---|
| Non-government (All Citizen Model, Corporate) | Up to 80% | At least 20% | Corpus up to ₹8 lakh: withdraw all. ₹8–12 lakh: up to ₹6 lakh, rest via SUR for at least 6 years or annuity. |
| Central and State Government | Up to 60% | At least 40% | Same ₹8 lakh and ₹8–12 lakh options |
You can also put up to 100% into an annuity. Exiting before the vesting period (premature exit) is different: at least 80% must buy an annuity. You can keep your account running and defer the lump sum or annuity up to age 85; in the All Citizen Model you can also exit normally after 15 years of subscription.
Is the NPS lump sum tax-free?
Only up to 60% of the corpus. The Income-tax Act, 2025 (in force from 1 April 2026) carried over the old Section 10(12A) exemption, which covers withdrawals of up to 60% at closure. If a non-government subscriber takes the full 80% now allowed, the extra 20% is added to that year's income and taxed at the slab rate. Buying the annuity is not taxed, but the pension it pays is taxable every year. As of this update no clarification extending the exemption to 80% had been issued, so check the current position before you withdraw.
NPS tax benefits for tax year 2026-27
From 1 April 2026 the Income-tax Act, 2025 replaced the 1961 Act. The section numbers changed, but the NPS limits stayed the same:
| Benefit | Old section (1961) | New section (2025 Act) | Limit | Regime |
|---|---|---|---|---|
| Your own contribution | 80CCD(1) | 123 with Schedule XV | Up to 10% of basic + DA (20% of gross income if self-employed), inside the ₹1.5 lakh 80C basket | Old only |
| Extra own contribution | 80CCD(1B) | 124(3) | ₹50,000 over and above ₹1.5 lakh | Old only |
| Employer's contribution | 80CCD(2) | 124(1), 124(2) | 14% of basic + DA in the new regime and for government employees; 10% for private employers in the old regime | Both |
Employer contributions to EPF, NPS and superannuation together are taxable above ₹7.5 lakh a year. If you are on the new regime, asking your employer to pay part of your CTC into NPS is one of the few deductions left.
Tier I vs Tier II
- Tier I is the pension account. It carries the tax benefits above and follows the exit rules (partial withdrawals only for specific needs, such as a home, children's education or marriage, or medical treatment).
- Tier II is an optional voluntary account you can open once you have Tier I. You can withdraw any time, but in general you get no tax deduction for it. This calculator projects Tier I.
NPS Vatsalya for children
NPS Vatsalya lets parents or guardians open an NPS account for a child under 18. The minimum is ₹250 to open and ₹250 a year, with no upper limit. At 18 the child completes fresh KYC and can stay in the scheme until 21, move the money to a regular NPS account, or exit (up to 80% lump sum and at least 20% annuity, or the full amount if the corpus is below ₹8 lakh). Under the old regime, contributions qualify within the same extra ₹50,000 limit. To project a Vatsalya account, set your age to the child's age and the exit age to 18.
Worked example: ₹5,000 a month from 30 to 60
At a 10% expected return, a 40% annuity at 6.5%, and 6% inflation:
| Setup | Corpus at 60 | Lump sum (60%) | Monthly pension |
|---|---|---|---|
| Flat ₹5,000 a month | About ₹1.04 crore | About ₹62 lakh | About ₹22,500 |
| ₹5,000 rising 5% a year | About ₹1.66 crore | About ₹1 crore | About ₹36,000 |
| Rising 5%, Auto choice LC50 (11% / 8% / 7.5%) | About ₹1.29 crore | About ₹78 lakh | About ₹28,000 |
In today's money, ₹36,000 a month in 30 years is worth only about ₹6,300 at 6% inflation. That is why the inflation-adjusted figures matter. Staying invested to 65 with the flat ₹5,000 lifts the corpus to about ₹1.71 crore.
Frequently asked questions
How is the NPS pension calculated?
The calculator grows your monthly contributions (plus any employer contribution) at the expected return until your exit age. The share of the corpus you use to buy an annuity, at least 20% for non-government subscribers or 40% for government employees, is multiplied by the annuity rate and divided by 12 to give the monthly pension. The rest can be taken as a lump sum.
How much NPS can I withdraw as a lump sum at 60?
Since PFRDA's December 2025 amendments, non-government subscribers (All Citizen Model and Corporate) can take up to 80% as a lump sum and must use at least 20% for an annuity. Government employees can take up to 60% and must annuitise at least 40%. If the corpus is ₹8 lakh or less you can withdraw all of it.
Is the NPS lump sum tax-free?
Up to 60% of the corpus is tax-free at exit. If you withdraw more, up to the 80% now allowed for non-government subscribers, the part above 60% is taxed at your slab rate in that year. The annuity pension is taxable as income every year.
What return should I assume for NPS?
NPS returns are market-linked and not guaranteed. Equity-heavy schemes have historically returned more than bond-heavy ones, but past returns do not predict future returns. A blended 8% to 10% a year is a common planning range. Try a lower figure as well to see a cautious case.
What are the NPS tax benefits in 2026-27?
In the old regime you can deduct your own contribution within the ₹1.5 lakh 80C limit and another ₹50,000 on top (the old 80CCD(1B), now Section 124(3) of the Income-tax Act, 2025). In the new regime your own contribution gets no deduction, but your employer's contribution is deductible up to 14% of basic pay plus DA (old 80CCD(2), now Section 124).
Can I continue NPS after 60?
Yes. You can keep contributing and defer the lump sum and annuity, and stay in NPS up to age 85. Set a later exit age in the calculator to see how much more the corpus and pension could grow.
What is the difference between NPS Tier I and Tier II?
Tier I is the main pension account. It has the tax benefits and the withdrawal and exit rules. Tier II is an optional savings account you can add. It has no lock-in, but generally no tax deduction either.
What is NPS Vatsalya?
NPS Vatsalya is an NPS account that parents or guardians open for a child under 18, with a minimum of ₹250 a year. At 18 the child can continue until 21, shift to regular NPS, or exit with up to 80% as a lump sum (all of it if the corpus is below ₹8 lakh).