What is the NPS calculator?

An NPS calculator estimates your National Pension System retirement corpus and monthly pension based on your monthly contribution, current age, retirement age, and expected rate of return. At retirement, 60% of the corpus can be withdrawn tax-free and 40% is used to buy an annuity (pension).

How much should I invest in NPS for ₹50,000 monthly pension?

To receive a ₹50,000 monthly pension from NPS, you need an annuity corpus of approximately ₹1.5–2 crore (at 6% annuity rate). Working backwards: if you have 25 years to retirement and expect 10% NPS returns, you need to invest approximately ₹10,000–₹14,000 per month in NPS. Use Arthzo's NPS Calculator with the 'reverse calculate' feature to find your exact number.

What is NPS Tier 1 vs Tier 2?

NPS Tier 1 is the primary pension account with tax benefits (₹1.5L under 80C + ₹50,000 under 80CCD(1B)) but has withdrawal restrictions — you can only withdraw 60% at retirement (40% goes to annuity). NPS Tier 2 is a voluntary savings account with no lock-in or withdrawal restrictions, but offers NO tax benefits. This calculator applies to NPS Tier 1.

What is the expected rate of return on NPS?

NPS returns vary by asset allocation. Equity funds (E) have historically returned 10–14% p.a. Corporate bonds (C) return 8–10% p.a. Government securities (G) return 7–9% p.a. A balanced auto-choice portfolio typically averages 9–11% p.a. Most financial planners use 10% as a conservative long-term assumption.

Is NPS withdrawal tax-free?

Yes. At retirement (age 60), 60% of the NPS corpus can be withdrawn completely tax-free. The remaining 40% must be used to purchase an annuity, and the monthly pension received from that annuity is taxable as income. Partial withdrawals of up to 25% of own contributions are also allowed after 3 years under specific conditions.

NPS vs PPF: which is better for retirement?

NPS typically generates higher returns (9–12%) than PPF (7.1% current rate), making it better for long-term retirement wealth. However, PPF is fully tax-free (EEE status) while NPS pension income is taxable. NPS is better for higher returns and larger corpus; PPF is better for guaranteed, fully tax-free savings. Ideally, use both for a diversified retirement plan.

What is the maximum tax benefit from NPS?

NPS offers a maximum tax deduction of ₹2 lakh per year: ₹1.5 lakh under Section 80C (shared with other instruments like PPF, ELSS) and an additional ₹50,000 exclusively under Section 80CCD(1B). If you're in the 30% tax bracket, ₹50,000 invested in NPS saves ₹15,600 in tax (including 4% cess) that you would otherwise pay.

Can I continue NPS after 60?

Yes. From 2022 onwards, NPS subscribers can defer their retirement and continue contributions up to age 75. You can also exit at any age after 60 but choose to stay invested until 75 for continued compounding. However, the tax benefit on contributions beyond 60 may vary.

NPS Calculator 2026 – National Pension System Returns & Pension Estimator | Arthzo

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🏛 Government Scheme · Updated 2026

NPS Calculator — Plan Your
Retirement Corpus & Pension

Calculate your National Pension System maturity corpus, monthly pension, tax savings, and year-wise growth — all from your date of birth.

🎂 DOB-Based Age Auto-Calc 📊 Year-Wise Breakdown 🔁 NPS vs SIP vs PPF 🧾 Tax Savings Estimator ⚡ Free & Instant

🔢 Enter Your NPS Details

Date of Birth Age: —

Date of NPS Enrolment —

Retirement Age 60 yrs

Investment Period — yrs

📅 Set DOB & enrolment date above

Monthly Contribution ₹5,000

Expected Annual Return (NPS) 10.00%

Annuity Rate (Pension Rate) 6.00%

Already have an NPS corpus? Add existing NPS balance for accurate projection

Existing NPS Corpus ₹0

Your Retirement Projection

Total Corpus at Retirement

₹—

estimated at retirement age

—

Wealth
Gained

Total Invested — ₹—

Returns Earned — ₹—

₹—

Lump Sum 60%
(Tax-Free)

₹—

Annuity 40%
(For Pension)

₹—

Est. Monthly
Pension

— yrs

Investment
Period

Corpus Growth Over Time

See how your NPS corpus compounds year by year until retirement

Year-by-Year Corpus Build-Up

Invested amount vs total corpus

Year-Wise Breakdown

Detailed annual view of your NPS corpus growth

Year	Age	Monthly SIP	Total Invested	Returns Earned	Corpus Value	Growth %

NPS vs SIP vs PPF Comparison

See which instrument builds the biggest retirement corpus for the same monthly investment

📊 NPS vs SIP vs PPF — Side by Side

Monthly: ₹

Yrs:

SIP Rate: %

PPF rate fixed at 7.1% (current govt rate) · NPS rate from calculator above · SIP is market-linked estimate · *Taxability varies

Feature	NPS Tier 1	SIP (Equity MF)	PPF

🧾 NPS Tax Savings Estimator

Calculate exactly how much tax you save by investing in NPS — Section 80C + 80CCD(1B)

💰 Annual Tax Savings from NPS Investment

Your Tax Regime

Tax Slab

Annual NPS Contribution (80C)

Extra NPS (80CCD1B — upto ₹50,000)

₹—

Total Tax Saved

₹—

Total Deduction

—%

Effective NPS Cost*

ℹ️

*Effective NPS cost = actual out-of-pocket cost after tax savings. For a 30% slab: investing ₹2L in NPS actually costs you only ~₹1.38L after tax savings. Use Arthzo's Income Tax Calculator to compute your full tax liability.

What is NPS? Everything You Need to Know

The National Pension System — how it works, who should invest, and how to maximise returns

🏛 What is NPS?

The National Pension System (NPS) is a government-regulated, market-linked retirement savings scheme launched in 2004. Open to all Indian citizens aged 18–70, it is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

You invest regularly (monthly or annually) into NPS Tier 1 during your working years. At retirement (age 60), you can withdraw 60% as a tax-free lump sum. The remaining 40% is mandatorily used to buy an annuity (monthly pension) from a PFRDA-approved insurance company.

NPS is one of the lowest-cost investment products in India — fund management charges are just 0.01% p.a. — compared to 1–2.5% for mutual funds.

📐 NPS Calculation Formula

NPS works exactly like a SIP + annuity at retirement:

Corpus = P × [((1+r)^n – 1) / r] × (1+r) + Existing × (1+r)^n P = Monthly contribution · r = Monthly rate (annual÷12) · n = Total months · Existing = Opening corpus

At retirement:

Lump Sum (60%) = Total corpus × 0.60 — completely tax-free
Annuity corpus (40%) = Total corpus × 0.40 — used to buy pension
Monthly Pension = Annuity corpus × Annuity rate ÷ 12

Annuity rates from PFRDA-empanelled insurers typically range from 5.5% to 7.5% depending on the annuity plan chosen.

✅ Benefits of NPS Investment

Tax benefit up to ₹2 lakh/year — ₹1.5L under 80C + ₹50,000 exclusively under 80CCD(1B)
Market-linked returns — historically 9–12% via equity-heavy allocation
Lowest fund management fee — 0.01% p.a. vs 1–2.5% for MF
Flexible asset allocation — choose between Equity (E), Corporate Bonds (C), and Govt Securities (G)
Auto-choice / Active choice — reduce equity exposure automatically as you age
Partial withdrawal — up to 25% of own contributions after 3 years for specific needs
Online access — manage via NPS Trust website or CRA (KFintech/Protean)

⚠️ NPS Limitations to Know

40% mandatory annuity — you cannot access 40% of corpus as lump sum
Pension income is taxable — unlike PPF/EPF maturity, monthly pension is added to income
Lock-in until 60 — very limited early exit options before retirement age
Market risk on corpus — equity allocation means returns can vary
Annuity rates vary — the pension you receive depends on rates at retirement, not today's rate
Not available for new regime tax benefits — 80CCD(1B) additional ₹50K benefit only under Old Regime

⚠️

Important: Under the New Tax Regime (default from FY 2024-25), the exclusive 80CCD(1B) deduction of ₹50,000 is NOT available. Only employer contributions under 80CCD(2) can be claimed.

NPS Tier 1 vs Tier 2 — Key Differences

🏆 NPS Tier 1 (Pension Account)

PurposePrimary pension account

Min. Contribution₹500/month or ₹1,000/year

Tax Benefit (80C)✅ Up to ₹1.5 lakh

Extra Tax (80CCD1B)✅ Up to ₹50,000 extra

Withdrawal at 6060% lump sum (tax-free)

Mandatory Annuity40% of corpus

Premature ExitAllowed after 10 yrs (80% annuity)

Lock-inTill age 60 (or 3 yrs minimum)

💛 NPS Tier 2 (Savings Account)

PurposeVoluntary savings add-on

Min. Contribution₹250 per transaction

Tax Benefit (80C)❌ Not available

Extra Tax (80CCD1B)❌ Not available

Withdrawal✅ Anytime, no restriction

Mandatory Annuity❌ No, full withdrawal

Premature Exit✅ No lock-in

Lock-inNone

💡

Strategy: Use NPS Tier 1 for the tax benefit and retirement corpus. Use NPS Tier 2 as a low-cost debt/equity parking vehicle if you want flexibility (though it offers no tax advantage). Combine NPS Tier 1 with PPF and SIP for a balanced, tax-efficient retirement plan.

How Much to Invest for a ₹50,000 Monthly Pension?

Years to Retirement	NPS Return Assumption	Annuity Rate	Required Corpus (40%)	Total Corpus Needed	Monthly SIP Required
10 years	10%	6%	₹1,00,00,000	₹2,50,00,000	₹1,30,800/mo
20 years	10%	6%	₹1,00,00,000	₹2,50,00,000	₹32,900/mo
25 years	10%	6%	₹1,00,00,000	₹2,50,00,000	₹17,500/mo
30 years	10%	6%	₹1,00,00,000	₹2,50,00,000	₹9,500/mo
35 years	10%	6%	₹1,00,00,000	₹2,50,00,000	₹5,200/mo

🎯

Key Insight: Starting NPS at age 25 vs 35 requires 3× less monthly investment for the same retirement pension. The earlier you start, the harder compounding works for you. Use the Goal Mode tab in the calculator above to find your exact required monthly investment.

Frequently Asked Questions

Everything you need to know about NPS and this calculator

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Disclaimer: All NPS calculations are estimates based on assumed rates of return and are for informational purposes only. Actual NPS returns depend on market performance and fund allocation. Annuity rates at retirement may differ from today's rates. The pension amount shown is an estimate. Please consult a PFRDA-registered financial advisor before making NPS investment decisions.