How much extra tax can I save through NPS?

NPS gives an additional ₹50,000 deduction under Section 80CCD(1B) over and above the ₹1.5 lakh 80C limit. At 30% tax slab, this saves ₹15,600 extra tax per year — on top of 80C savings.

What returns does NPS give?

NPS equity funds (Tier 1) have historically delivered 10-12% CAGR over 10+ years. Debt funds within NPS deliver 8-9%. You can choose allocation between equity, corporate bonds, and government securities based on your risk profile.

Government Pension Scheme · Tax Efficient

NPS Calculator —
Your Retirement Pension Estimate

Calculate your National Pension Scheme corpus and monthly pension income at retirement. See the tax-free lumpsum and annuity breakdown. This calculator is built for Indian investors and taxpayers using the latest rules from the Income Tax Act, SEBI regulations, EPFO guidelines, and RBI circulars applicable for FY 2025-26. All results update instantly in your browser with no data transmitted to our servers. Use the inputs to model your specific scenario, then compare against the current year limits and rates shown on the Income Tax Department portal at incometax.gov.in. This calculator follows the exact mathematical formulas prescribed by the Income Tax Act, SEBI regulations, EPFO guidelines, RBI circulars, and AMFI rules for FY 2025-26. Results update instantly in your browser. No data is stored or transmitted. Use these results as a planning baseline and consult a SEBI-registered investment adviser or Chartered Accountant for decisions involving significant amounts. The most accurate and current tax rates are available on the Income Tax Department portal at incometax.gov.in and the GST portal at gst.gov.in. Understanding the precise mechanics of this calculation enables better financial decisions. Every input variable has a different sensitivity — some inputs change the result dramatically while others have minimal impact. For investment calculators, the return rate assumption is the most sensitive variable. For tax calculators, your filing status and deductions matter most. For loan calculators, the interest rate and tenure interact to determine total cost. Running multiple scenarios with conservative, realistic, and optimistic assumptions gives a range of outcomes rather than a single number, which is the foundation of sound financial planning.

Your NPS Details

Current Age

30 yrs

1860

Monthly Contribution

₹5,000

₹500₹1L

Expected Annual Return

10% p.a.

6%15%

Annuity Rate (on 40%)

6% p.a.

4%10%

Annuity Percentage

40%

40% (min)100%

Total NPS Corpus at 60

₹0

after 30 years of contributions

Tax-Free Withdrawal

₹0

Annuity Corpus

₹0

Monthly Pension

₹0

Total Invested

₹0

Withdrawal vs Annuity split0%

Tax-free withdrawalAnnuity

Retirement Age

60 Years

NPS matures at 60

Years to Retire

0 yrs

investment horizon

80C + 80CCD(1B) Benefit

₹0

annual tax deduction

NPS Corpus Growth

Year-by-Year NPS Growth

Age	Total Invested (₹)	Returns (₹)	NPS Corpus (₹)	Growth %

NPS Calculator — All Your Questions Answered

What is NPS and how does it work?+

The National Pension Scheme (NPS) is a voluntary, long-term retirement savings scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). You contribute monthly to a pension account (Tier 1), which is invested across equity (up to 75%), corporate bonds, and government securities based on your chosen allocation. At age 60, you can withdraw 60% as a tax-free lumpsum and must use the remaining 40% to purchase an annuity for monthly pension income.

What are NPS tax benefits?+

NPS offers triple tax benefits: (1) Section 80C: ₹1.5 lakh deduction on employee contributions. (2) Section 80CCD(1B): Additional ₹50,000 deduction exclusive to NPS (over and above 80C limit). (3) Section 80CCD(2): Employer contributions up to 10% of salary are tax-free (14% for government employees). At maturity, 60% withdrawal is completely tax-free. The 40% annuity income is taxed as regular income. NPS is one of the most tax-efficient retirement instruments in India.

What returns can I expect from NPS?+

NPS returns depend on your asset allocation. With 75% equity allocation (maximum allowed), historical NPS equity fund returns have been 10–12% p.a. over 10+ years. A balanced 50% equity, 50% debt allocation typically returns 8–10% p.a. Conservative portfolios (25% equity) return 7–9% p.a. The default Auto Choice (Life Cycle Fund) gradually reduces equity as you age — starting at 75% equity at age 18 and reducing to 15% at age 55.

NPS vs PPF vs ELSS — which is best for retirement?+

Each serves a different purpose: NPS gives the highest extra tax benefit (₹50,000 via 80CCD(1B)) and equity growth potential but locks money till 60. PPF is completely tax-free (EEE) — contributions, interest, and maturity — but returns are fixed at 7.1% p.a. currently. ELSS gives 80C deduction with only 3-year lock-in and equity-level returns (12–15%). Ideal strategy: max out ELSS (₹1.5L in 80C) + add ₹50,000 to NPS for the extra deduction + EPF through employer. This maximises tax savings and growth.

Can I withdraw from NPS before 60?+

Partial withdrawal from NPS Tier 1 is allowed after 3 years for specific purposes: higher education, marriage of children, home purchase, or critical illness treatment. You can withdraw up to 25% of your own contributions. Premature exit before 60 (after 10 years) requires 80% of corpus to go into annuity and only 20% can be withdrawn. NPS Tier 2 is a flexible, voluntary account with no lock-in — but Tier 2 contributions don't get tax benefits (except for government employees).