Estimate NPS retirement corpus, tax-free lump sum, and projected monthly pension using contribution, return assumptions, and annuity allocation. Includes 80CCD(1B) ₹50K and employer 14%/10% deductions.
Max 85 (NPS 3.0 update)
80C / 80CCD(1B)
80CCD(2) — not taxable
Increase contributions each year to match salary growth (5–8% typical)
Equity (E): historical 12–14% · Balanced: 9–11% · Conservative (G): 7–8%
Private sector NPS 3.0: 20% minimum annuity (corpus > ₹12L)
PFRDA empanelled annuity providers currently offer 5–7%
India avg CPI: ~5–6% · Used to show real purchasing power
Total Corpus at Retirement
₹2,86,17,631
Real value in today's money
₹37,23,303
Adjusted for 6% inflation over 35 years
Lump Sum (Tax-free)
₹1,71,70,579
60% of corpus
Monthly Pension
₹57,235
Real value: ₹7,447/mo · Taxable
Tax savings reminder
• 80CCD(1B): Up to ₹50,000 per year extra deduction — exclusive to NPS, over and above the ₹1.5L 80C limit (Old Regime only)
• 80CCD(2) (employer): Employer NPS contributions are not taxable — up to 14% of Basic + DA (both regimes in NPS 3.0, up from 10%)
• At exit: Lump sum withdrawal is fully tax-free. Monthly annuity income is taxed as per your slab.
Section 80CCD(1)
₹1.5 L
Employee contribution within 80C limit. Up to 10% of salary (basic + DA). Old regime only.
Section 80CCD(1B)
+₹50,000
Additional deduction over 80C limit. Available for self-employed too. Old regime only.
Section 80CCD(2)
10–14%
Employer contribution deductible. 14% for central govt, 10% for private. Available in new regime too.
Total potential deduction (Old Regime + Private Sector, ₹15L basic)
| Scenario | Lump Sum (tax-free) | Annuity (taxable) | Condition |
|---|---|---|---|
| Normal exit at 60 | Up to 60% | Min. 40% | Default exit |
| Corpus < ₹5 lakh at 60 | 100% | None required | Small corpus relief |
| Premature exit (before 60) | Up to 20% | Min. 80% | After 5 years |
| Partial withdrawal | Up to 25% of own contributions | — | 3 years + specific purpose |
| Death of subscriber | 100% | Optional by nominee | Nominee receives entire corpus |
Section 80CCD(1B) gives an additional ₹50,000 deduction per year for NPS Tier 1 contributions, over and above the ₹1.5 lakh Section 80C limit. This is only available under the old tax regime. For someone in the 30% slab, this extra ₹50,000 saves ₹15,600 in tax (30% + 4% cess). Under the new tax regime, 80CCD(1B) is not available.
Section 80CCD(2) allows deduction on employer's NPS contribution: up to 14% of basic salary for Central Government employees and up to 10% of basic salary for private sector employees and state government employees. This deduction is available even under the new tax regime — it does not come under the 80C limit. For example, a private sector employee with ₹1L basic salary gets ₹10,000/month employer NPS contribution deducted from taxable income.
At age 60 (normal exit), you can withdraw up to 60% of the corpus as lump sum — this lump sum is completely tax-free. The remaining 40% must be used to purchase an annuity for monthly pension. The annuity income is taxable as per your applicable income tax slab.
At maturity (age 60), a minimum 40% of the NPS corpus must be annuitised to purchase a pension. You can choose to annuitise more — up to 100% — but only a maximum 60% can be withdrawn as lump sum. If your corpus is below ₹5 lakh at age 60, you may withdraw 100% as lump sum (subject to periodic PFRDA review).
As per NPS 3.0 reforms (effective 2024), individuals aged 18 to 70 can open NPS Tier 1 accounts. The maximum exit age has been extended to 85 years, giving subscribers a longer window to accumulate. Previously the entry age cap was 65.
Partial withdrawals up to 25% of your own contributions (not employer contributions) are allowed after 3 years of account opening for specified purposes: higher education, marriage of children, home purchase/construction, critical illness. A maximum of 3 partial withdrawals are permitted.
Tier 1 is the mandatory pension account with lock-in until age 60 and tax benefits. Tier 2 is a voluntary savings account with no lock-in — but no additional tax deduction (except for Central Government employees who get 80C benefit on Tier 2). Tier 1 is required before opening Tier 2.
NPS offers Active Choice (you decide E/C/G/A allocation) and Auto Choice (lifecycle fund with age-based allocation). Under Active Choice, equity (E) is capped at 75% until age 50, then gradually reduces. For long horizons (20+ years), maximum equity allocation historically gives better returns. NPS investment returns are not guaranteed.
Estimates are illustrative only. NPS returns are market-linked and not guaranteed. Tax rules are as per FY 2025-26; consult a SEBI-registered advisor for personalised advice.