NPS Calculator

Any Indian citizen (resident or non-resident) between the ages of 18 and 75 can open an NPS account. The applicant must comply with the prescribed KYC norms.

A Tier-1 account is a mandatory retirement account with strict withdrawal restrictions and offers tax benefits. A Tier-2 account is a voluntary savings account that can only be opened if you have an active Tier-1 account; it has no lock-in period but does not offer tax benefits (except for government employees under specific rules).

Investments in NPS qualify for tax deductions up to ₹1.5 lakh under Section 80CCD(1) within the overall Section 80C limit. An additional deduction of up to ₹50,000 is allowed under Section 80CCD(1B) under the Old Tax Regime. Furthermore, employer contributions up to 10% of basic salary are deductible under Section 80CCD(2) under both tax regimes.

For a Tier-1 account, the minimum initial contribution to open the account is ₹500, and the minimum contribution per financial year is ₹1,000. There is no maximum limit on contributions, though tax benefits are capped as per prevailing tax laws.

The maturity corpus is calculated by compounding your regular (monthly or annual) contributions at an expected annual return rate over the investment period (from your current age until retirement, typically age 60).

No, at age 60, you can withdraw a maximum of 60% of the accumulated corpus tax-free as a lump sum. The remaining 40% (minimum) must be mandatorily utilized to purchase a life annuity from a registered insurance company.

The annuity amount is the portion of the retirement corpus used to purchase the annuity. The monthly pension is estimated by multiplying this annuity amount by the expected annual annuity interest rate and dividing the result by 12.

No. While the lump sum withdrawal of up to 60% is tax-exempt, the monthly pension received as annuity is treated as income and taxed according to your individual income tax slab in the year of receipt.

Yes. Under Active Choice, you can decide the asset allocation across Equity (E), Corporate Debt (C), Government Securities (G), and Alternative Assets (A), subject to a 75% cap on equity. Under Auto Choice, asset allocation is determined automatically based on your age and risk profile (LC75, LC50, or LC25).