How this calculator works
NPS (National Pension System) works like a monthly SIP into a market-linked pension account: every month, your contribution grows at your assumed rate of return, and each subsequent month's contribution starts compounding from the day it's invested. Over decades, this compounding is what drives most of the final corpus — not the contributions themselves.
The accumulation math is: monthly rate r = annual rate ÷ 12 ÷ 100, number of months n = (retirement age − current age) × 12, and Corpus at retirement = Monthly contribution × [((1+r)n − 1) ÷ r] × (1+r). This is the standard SIP future-value formula, applied to your NPS contributions.
This calculator only estimates the corpus you accumulate before retirement. What happens after — your pension payout — depends on annuitization, covered below.
What happens at retirement: the 40% annuitization rule
NPS isn't a lump-sum-only product. By rule, when you retire, at least 40% of your accumulated corpus must be used to purchase an annuity from an insurance provider empanelled with the PFRDA. This annuity then pays you a regular pension for the rest of your life. The remaining portion (up to 60%) can typically be withdrawn as a lump sum, subject to prevailing NPS withdrawal rules — a portion of which may be tax-exempt.
This calculator deliberately does not compute a projected monthly pension figure. Annuity payout rates vary significantly by insurer, by the annuity option you choose, and change over time as interest rates move — so any number we showed here would be a guess, not a reliable estimate. Once you're closer to retirement, compare live annuity quotes from PFRDA-empanelled insurers for an accurate pension figure.
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Talk to a CA →Is NPS return guaranteed?
No — NPS returns are market-linked, so the rate you enter here is an assumption, not a guarantee. Actual returns depend on your chosen pension fund manager, your asset allocation between equity, corporate bonds, and government securities, and how markets perform over your entire working life.
What happens to my NPS corpus at retirement?
By NPS rules, at least 40% of your corpus must be used to buy an annuity at retirement, which pays you a regular pension. The remaining portion can be withdrawn, subject to NPS withdrawal rules. This calculator estimates only your accumulated corpus — it doesn't project the monthly pension your annuity would pay, since annuity payout rates vary by insurer and change over time.
Is NPS contribution tax-deductible?
Yes — NPS contributions are deductible under Section 80CCD, and there's an additional deduction of up to ₹50,000 available under Section 80CCD(1B), over and above the general Section 80C limit of ₹1.5 lakh.
Can I choose my own NPS asset allocation?
Yes, within regulatory limits on equity exposure — NPS lets you choose between Active Choice (you set the equity/corporate bond/government securities split yourself) and Auto Choice (allocation shifts automatically as you age). This calculator applies a single expected return across your entire accumulation period and doesn't model returns separately by asset class.
This tool is for quick estimation only and is not a substitute for professional financial or tax advice. For your specific situation, consult a practicing CA or a SEBI-registered investment adviser.
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