Logo
Financial Calculator

NPS Calculator India 2026 - National Pension System

Plan your retirement with India's most comprehensive pension scheme. Calculate returns, tax benefits, and annuity options.

Tax Benefits up to ₹2 Lakh
Government Backed
Professional Fund Management
Flexible Investment Options
NPS Investment Details
Min: ₹1,000
₹

Five Thousand rupees

10%
6%15%
6%
4%8%

Defer withdrawal beyond age 60 to let your corpus grow (up to age 85)

Defer for 0 years
No defermentMax: 25 years
Was this helpful?

NPS Calculation Formulas

Understand the mathematical formulas used to calculate NPS retirement corpus and pension.

Corpus = P × [((1 + r)^n - 1) / r] × (1 + r)

Example:

₹50,000 annual NPS at 10% p.a. for 30 years

50,000 × [((1 + 0.10)^30 - 1) / 0.10] × 1.10
= ₹82,25,000

Variables:

P - Annual contribution amount
r - Expected annual return rate
n - Investment period in years

Monthly Pension = (Corpus × Annuity Rate) / 12

Example:

₹82,25,000 corpus with 6% annuity rate

(82,25,000 × 0.06) / 12
= ₹41,125 monthly pension

Variables:

Corpus - Retirement corpus amount
Annuity Rate - Annual annuity rate (typically 6-7%)

These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.

NPS 2025 Amendment Rules - Key Changes

Updated December 2025: PFRDA has introduced significant changes to NPS exit and withdrawal rules. Here's what you need to know in simple terms.

Major Changes in 2025

  • Maximum Age Extended: You can now stay in NPS until age 85 (previously 75 years)
  • Flexible Withdrawal: New corpus-based withdrawal rules for easier access to funds
  • Reduced Annuity for Non-Government: Minimum annuity requirement reduced from 40% to 20% for non-government subscribers
  • Deferment Option: You can defer annuity purchase or lump sum withdrawal until age 85

1. Normal Exit at Retirement (Age 60 or Later)

Subscriber TypeMinimum AnnuityMaximum Lump SumNotes
Government Sector40% of corpus60% of corpusDefault annuity will be purchased automatically if you don't choose
Non-Government Sector20% of corpus80% of corpusMore flexibility for private sector employees

2. Corpus-Based Withdrawal Rules (New in 2025)

The new rules provide more flexibility based on your total corpus amount:

Corpus AmountWithdrawal OptionsRemaining Amount
≤ ₹5 Lakh100% lump sum withdrawal - No annuity requiredN/A - Full withdrawal allowed
> ₹5 Lakh but < ₹12 LakhMaximum ₹6 Lakh as lump sum withdrawalMust use for: Annuity OR Systematic withdrawal for minimum 6 years
≥ ₹12 LakhStandard rules apply (20% or 40% annuity based on subscriber type)Rest can be withdrawn as lump sum

3. Premature Exit (Before Retirement Age)

Important: If you exit NPS before reaching retirement age (60 years), different rules apply:

  • Minimum 80% of corpus must be used to purchase annuity
  • Maximum 20% of corpus can be withdrawn as lump sum
  • However, if corpus ≤ ₹5 lakh, you can withdraw 100% as lump sum
  • Lump sum withdrawal is taxable as per your income tax slab
ScenarioAnnuity RequirementLump Sum Allowed
Voluntary exit before age 6080% of corpus (mandatory)20% of corpus (taxable)
Corpus ≤ ₹5 LakhNo annuity required100% withdrawal allowed

4. Death Benefit Rules (Updated 2025)

In case of subscriber's death, the nominee receives the entire corpus. New rules apply:

Corpus AmountNominee OptionsImportant Notes
≤ ₹5 Lakh100% lump sum withdrawal - Tax-freeNo annuity purchase required
> ₹5 Lakh but < ₹12 LakhMaximum ₹6 Lakh as lump sum (tax-free)Rest: Annuity OR Systematic withdrawal for 6+ years
> ₹5 Lakh (Before Annuity Purchase)80% for default annuity (automatic)Default annuity covers subscriber, spouse, and family members

Critical: If no nomination is registered, the corpus will be paid to legal heirs based on succession certificate or legal heir certificate issued by competent authorities.

5. Deferment Options (New Feature)

You can now defer your exit from NPS:

  • Stay until age 85: You can continue in NPS and defer annuity purchase or lump sum withdrawal until you reach 85 years
  • No fresh contributions: After retirement age, you cannot make new contributions, but existing corpus continues to grow
  • Exit anytime: You can exit at any time between age 60-85 by submitting a request to NPS Trust or authorized intermediary
  • Account maintenance charges: You will need to pay account maintenance charges and fees during the deferment period

Important Takeaways

For Small Corpus (≤ ₹5 Lakh):

  • You can withdraw 100% as lump sum
  • No mandatory annuity purchase
  • Full flexibility for small investors

For Medium Corpus (₹5-12 Lakh):

  • Maximum ₹6 lakh lump sum withdrawal
  • Rest must be used for annuity or systematic withdrawal (6+ years)
  • More options than before

For Large Corpus (≥ ₹12 Lakh):

  • Standard rules apply (20% or 40% annuity)
  • Government: 40% annuity, 60% lump sum
  • Non-Government: 20% annuity, 80% lump sum

Nomination is Critical:

  • Always keep nomination updated
  • Without nomination, legal heirs need succession certificate
  • Nominee gets 100% corpus tax-free
NPS Fund Performance Analysis

Best Performer (5Y)

14.5%

Average Return (5Y)

11.0%

Total Funds

5

Avg Expense Ratio

1.01%

Fund NameAsset Class5Y ReturnExpense RatioRisk

HDFC Pension Fund - Equity Scheme

HDFC Pension Management Company Ltd.

Equity14.5%1.01%
High

SBI Pension Fund - Equity Scheme

SBI Pension Funds Pvt. Ltd.

Equity13.8%1.01%
High

Kotak Mahindra Pension Fund - Alternative Investment Scheme

Kotak Mahindra Pension Fund Ltd.

Alternative Investment10.9%1.01%
Medium

ICICI Prudential Pension Fund - Corporate Bond Scheme

ICICI Prudential Pension Funds Management Company Ltd.

Corporate Bond8.7%1.01%
Medium

UTI Retirement Solutions - Government Securities Scheme

UTI Retirement Solutions Ltd.

Government Securities7.1%1.01%
Low

Fund Selection Tips

For Young Investors (Age 25-35)
  • • Focus on equity funds for higher long-term returns
  • • Can tolerate higher volatility for better growth
  • • Consider 75-80% equity allocation
For Mid-Career (Age 35-50)
  • • Balanced approach with 60-70% equity
  • • Mix of equity and corporate bond funds
  • • Regular portfolio rebalancing

Important Disclaimer

Past performance is not indicative of future results. Fund performance data is updated as of 2024-12-01. Please consult with a financial advisor before making investment decisions. Returns are subject to market risks.

Employer Contribution & Tax Benefits

Maximize your NPS benefits with employer contributions and additional tax savings

How Employer Contribution Works

Contribution Limit

Employers can contribute up to 10% of basic salary + DA to your NPS account. This is over and above your own contributions.

Eligibility Criteria

  • • Employee must also contribute to NPS
  • • Available for both government and private sector
  • • No minimum service period required
  • • Contribution continues until retirement

Example Calculation

Basic Salary: ₹50,000/month

Employee Contribution (10%): ₹5,000/month

Employer Contribution (10%): ₹5,000/month

Total Monthly Investment: ₹10,000

Tax Benefits Breakdown

Section 80CCD(1) - Employee Contribution

Up to 10% of salary or ₹1.5 lakh (whichever is lower) under overall ₹1.5 lakh limit of Section 80C.

Section 80CCD(1B) - Additional Deduction

Additional ₹50,000 deduction exclusively for NPS contributions. This is over and above the ₹1.5 lakh limit.

Section 80CCD(2) - Employer Contribution

No upper limit for tax benefits on employer contributions. Entire amount is tax-free for the employee.

Maximum Tax Savings Example

• 80CCD(1): ₹1,50,000 (30% tax bracket = ₹45,000 saved)

• 80CCD(1B): ₹50,000 (30% tax bracket = ₹15,000 saved)

• 80CCD(2): ₹60,000 (30% tax bracket = ₹18,000 saved)

Total Annual Tax Savings: ₹78,000

Key Benefits of Employer Contribution

2x

Faster wealth accumulation with employer matching

₹78K

Maximum annual tax savings possible

No Limit

Tax benefits on employer contributions

How to Open NPS Account - Step by Step
1

Choose Point of Presence (POP)

Select from banks, post offices, or online aggregators like eNPS

2

Fill Application Form

Complete Subscriber Registration Form with accurate details

3

Submit Documents

Provide KYC documents, photographs, and initial contribution

4

PRAN Generation

Receive Permanent Retirement Account Number (PRAN) within 15 days

5

Fund Selection

Choose investment mix across Equity (E), Corporate Bond (C), Government Securities (G), Alternative (A)

Required Documents for NPS Account Opening

Complete list of documents needed to open your NPS account

Mandatory Documents

PAN Card (mandatory)
Aadhaar Card
Bank Account Proof (cancelled cheque/bank statement)
Address Proof (Aadhaar/Passport/Driving License)
Passport-size photographs (2 copies)
Initial contribution cheque/DD

Important Notes

PAN Card: Mandatory for all NPS accounts. Ensure PAN is linked with Aadhaar for seamless processing.

Bank Account: Should be in the same name as the NPS account holder. Joint accounts are not allowed.

Initial Contribution: Minimum ₹500 for account opening. Can be paid via cheque, DD, or online transfer.

Processing Time: PRAN is typically generated within 15 working days of successful application submission.

NPS Eligibility Criteria

Who can invest in National Pension System and contribution limits

Eligibility Requirements

Age: 18-65 years for joining NPS
Indian citizens and NRIs are eligible
Government employees have separate NPS scheme
Corporate employees may have employer contributions
Minimum annual contribution: ₹6,000 (₹500 per month)
No upper limit on contributions
KYC compliance mandatory

Special Categories

Government Employees

All government employees (except armed forces) joining service from January 1, 2004, are covered under NPS automatically.

Corporate Employees

Private sector employees can join through employer or individually. Employer contributions provide additional tax benefits.

NRIs (Non-Resident Indians)

Can open and maintain NPS accounts but cannot contribute while having NRI status. Can resume upon return to India.

Who Should Invest in NPS?

Ideal for NPS Investment

Salaried Employees

Get additional tax benefits through employer contributions under 80CCD(2)

Self-Employed Individuals

Build a disciplined retirement corpus with tax benefits up to ₹2 lakh

Young Professionals (20-35 years)

Leverage the power of compounding over 25-40 years for wealth creation

Tax-Conscious Investors

Maximize tax savings with benefits under sections 80CCD(1), 80CCD(1B), and 80CCD(2)

Risk-Averse Investors

Government-backed scheme with professional fund management

Consider Alternatives

Near Retirement (55+ years)

Limited time for wealth accumulation and mandatory annuity purchase

High Liquidity Needs

Lock-in until age 60 with limited withdrawal options

High-Risk Appetite Investors

Returns may be lower compared to direct equity investments

Irregular Income Earners

May struggle with consistent monthly contributions required for optimal returns

NPS Calculator - Frequently Asked Questions

Get answers to common questions about National Pension System and our NPS calculator

What is the minimum and maximum contribution limit for NPS?

Minimum: ₹1,000 per month or ₹6,000 per year. Maximum: No upper limit, but tax benefits are capped at ₹1.5 lakh under 80CCD(1) and additional ₹50,000 under 80CCD(1B). Employer contributions under 80CCD(2) can be up to 10% of salary with no upper limit for tax benefits.

Can I withdraw money from NPS before retirement?

Yes, but with restrictions. Partial withdrawals (up to 25% of contributions) are allowed after 3 years for specific purposes (higher education, marriage, medical treatment, home purchase, skill development). For complete exit before retirement age, minimum 80% of corpus must be used for annuity purchase, and only 20% can be withdrawn as lump sum (taxable). However, if your corpus is ≤ ₹5 lakh, you can withdraw 100% as lump sum without annuity requirement.

What happens to my NPS account if I die before retirement?

The entire corpus (100%) goes to the nominee without any mandatory annuity purchase requirement. This makes NPS an excellent wealth transfer tool. If no nominee is registered, it goes to legal heirs as per succession laws. Hence, nomination is extremely important.

How is NPS taxation different from other investments?

NPS follows EET (Exempt-Exempt-Taxable) structure - contributions are tax-free, growth is tax-free, but withdrawals are taxable. However, 60% lump sum at retirement is tax-free. Only the annuity income is taxable as per your income tax slab.

Should I choose active or auto choice for fund management?

Active Choice: You decide asset allocation across E, C, G, A classes. Suitable for informed investors. Auto Choice: Based on age, automatically reduces equity exposure as you age (Life Cycle Fund). Recommended for beginners. You can switch between choices once per financial year.

What are the different annuity options available at retirement?

1) Annuity for life: Highest monthly pension, no return to family. 2) Annuity with return of purchase price: Lower pension, principal returned to nominee on death. 3) Joint life annuity: Pension continues to spouse after subscriber's death. 4) Increasing annuity: Pension increases annually by 3% but starts lower. Choose based on family situation and financial needs.

Can I continue NPS beyond age 60?

Yes! Under the 2025 amendments, you can now defer withdrawal up to age 85 (extended from 70). During this period, you cannot make fresh contributions but existing corpus continues to grow. You can exit anytime between age 60-85 by submitting a request. This deferment can significantly increase your retirement corpus due to additional compounding years. However, you'll need to pay account maintenance charges during this period.

How does employer contribution work in NPS?

Employers can contribute up to 10% of basic salary + DA to employee's account. This contribution is tax-deductible for employer and tax-free for employee under 80CCD(2) with no upper limit. However, employee must also contribute to be eligible for employer contribution.

What is the difference between NPS and PPF?

NPS: Higher potential returns through equity exposure, professional fund management, but mandatory annuity (20-40% based on subscriber type) and taxable withdrawals. However, 60% lump sum at retirement is tax-free. PPF: Fixed returns (~7-8%), completely tax-free, but lower wealth creation potential. NPS is better for wealth creation, PPF for capital protection. Under 2025 rules, NPS offers more flexibility with corpus-based withdrawal options.

Can NRIs invest in NPS?

Yes, NRIs can open and continue NPS accounts. However, they cannot make contributions while being NRI. Upon return to India, they can resume contributions. The account remains active and continues to earn returns even during NRI status.

What are the new withdrawal rules for small corpus (≤ ₹5 lakh)?

Under the 2025 amendments, if your NPS corpus is ₹5 lakh or less, you can withdraw 100% as lump sum without any mandatory annuity purchase. This provides complete flexibility for small investors. The withdrawal is tax-free if done at retirement age (60+).

What happens if my corpus is between ₹5-12 lakh at retirement?

For corpus between ₹5-12 lakh, you can withdraw a maximum of ₹6 lakh as lump sum (tax-free at retirement). The remaining amount must be used either for purchasing an annuity OR for systematic withdrawal over a minimum period of 6 years. This gives you more options than the standard rules.

What is the difference between government and non-government subscriber withdrawal rules?

Government sector subscribers must use minimum 40% of corpus for annuity purchase and can withdraw maximum 60% as lump sum. Non-government sector subscribers (private sector, self-employed) need only 20% for annuity and can withdraw up to 80% as lump sum. This provides more flexibility for private sector employees.

What is a default annuity and when is it purchased?

Default annuity is automatically purchased if you don't make a choice within the specified time. It covers the subscriber and spouse for life, with return of purchase price to family members in a specified order (mother, father, then children/legal heirs) upon death. If you defer annuity purchase and die before purchasing, the default annuity will be automatically purchased for your family.

Can I defer my NPS exit beyond retirement age?

Yes! Under 2025 rules, you can defer exit until age 85. You can submit a request to NPS Trust or authorized intermediary to defer annuity purchase or lump sum withdrawal. During deferment, your corpus continues to grow, but you cannot make fresh contributions and must pay account maintenance charges. You can exit anytime between age 60-85.
Was this helpful?