NPS Calculator

What is NPS?

National Pension System is a voluntary retirement savings scheme regulated by PFRDA. It offers market-linked returns with tax benefits and mandatory annuity at retirement.

NPS Account Types

• Tier I: Retirement account with lock-in till 60
• Tier II: Voluntary savings, no lock-in (no tax benefit)

Investment Choices

• Active Choice: You decide allocation (max 75% equity till 50, reducing after)
• Auto Choice: Age-based automatic allocation
• Asset classes: Equity (E), Corporate Debt (C), Government Bonds (G)

Tax Benefits

• 80CCD(1): Up to 10% of salary (within 80C limit of ₹1.5L)
• 80CCD(1B): Additional ₹50,000 (exclusive)
• 80CCD(2): Employer contribution up to 10% (no limit)
• 60% lump sum at retirement is tax-free

Withdrawal Rules

• At 60: Withdraw up to 60%, buy annuity with min 40%
• Before 60: Max 20% lump sum, 80% for annuity
• Partial withdrawal allowed for specific purposes

Annuity Options

• Annuity for life
• Annuity with return of purchase price
• Annuity for life with spouse continuation
• Annuity increasing at 3% p.a.

NPS vs Other Options

• vs EPF: NPS offers equity exposure, EPF is debt-only
• vs PPF: NPS has higher return potential but not EEE
• vs MF: NPS has lower costs but less liquidity