NPS Calculator India — FY 2025-26

Project your NPS corpus and pension based on your monthly contributions. For India. Uses current FY 2025-26 data.

Also available for:

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Monthly NPS contribution

₹

Amount you contribute to NPS every month

Current age

Your current age

Equity allocation (%)

NPS allows up to 75% in equity (auto choice reduces with age)

Expected equity return (%)

Expected return on NPS equity portion

Expected debt return (%)

Expected return on NPS debt portion

Annuity rate (%)

Expected annuity rate (current market: 5–7%)

NPS in India — Is It Worth It? A Realistic Analysis of Returns and Tax Benefits

## The NPS proposition NPS offers one of the best tax-saving deals in India: - ₹1.5 lakh under 80C (shared with EPF, PPF, ELSS, home loan principal) - Additional ₹50,000 exclusively under 80CCD(1B) — unique to NPS For someone in the 30% bracket, ₹50,000 additional NPS contribution saves ₹15,000 in tax instantly. That's a 30% guaranteed return on ₹50,000 even before any investment growth. ## The annuity problem The main complaint about NPS: 40% of corpus must purchase an annuity at retirement. Current annuity rates: 5–6.5%. This is broadly similar to FD rates and feels low compared to equity returns. But consider: the annuity is a pension for life. You can't outlive it. That longevity insurance has real value — especially for anyone worried about living to 90+. ## NPS vs EPF + Mutual Fund For a salaried employee in the 30% bracket with surplus beyond 80C: - Invest ₹50,000/year in NPS Tier 1 → saves ₹15,000 tax → effective investment cost is ₹35,000 - Alternative: invest ₹50,000 in ELSS → saves ₹15,000 tax (same), but no annuity lock-in For the extra ₹50,000 (80CCD(1B)), NPS is clearly superior because no other instrument offers that deduction. ## Bottom line For most salaried Indians: use NPS for the ₹50,000 extra deduction (80CCD(1B)). That's the clear win. Whether to use NPS for your full 80C depends on whether you value the pension certainty or the flexibility of ELSS/PPF.

Common questions — India

What are the NPS tax benefits?

Under old tax regime: (1) ₹1.5 lakh under Section 80CCD(1) — within the overall 80C limit. (2) Additional ₹50,000 under Section 80CCD(1B) — exclusively for NPS, no other 80C instrument offers this. (3) Employer contributions up to 10% of basic under 80CCD(2) — no monetary cap. Under new tax regime, only employer NPS deduction (80CCD(2)) is available.

What is the mandatory annuity requirement?

At age 60, you must use at least 40% of your NPS corpus to purchase a lifetime annuity from an IRDA-approved insurance company. The remaining 60% is tax-free lump sum. If your total corpus is less than ₹5 lakh, you can withdraw everything as lump sum.

What is the difference between Tier 1 and Tier 2 NPS?

Tier 1 is the primary pension account — tax benefits apply, but withdrawals are restricted until age 60. Tier 2 is a voluntary savings account — no tax benefits (except for government employees), but fully liquid and can be withdrawn anytime. Think of Tier 1 as your locked-in pension and Tier 2 as a flexible investment account.

How does NPS compare to EPF and PPF?

EPF: fixed return (~8.25%), employer contributes 12% of basic, fully taxable on withdrawal (unless 5+ years). PPF: ~7.1% guaranteed, tax-free maturity, but no equity exposure. NPS: market-linked returns with equity component, superior tax benefits (especially 80CCD(1B)), but 40% must go into annuity. NPS is best for high earners wanting maximum tax savings.

Can I withdraw from NPS before 60?

Partial withdrawal (up to 25% of contributions) is allowed after 3 years for specific purposes: children's education/wedding, house purchase, treatment of critical illness. Early exit (before 60) requires 80% to go into annuity — much less favourable than waiting until 60.

NPS Calculator India — FY 2025-26

NPS in India — Is It Worth It? A Realistic Analysis of Returns and Tax Benefits

Common questions — India

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