Project your NPS corpus and the pension it buys
₹1,13,96,627
Corpus at retirement
₹18,00,000
You contribute
₹95,96,627
Growth
₹68,37,976
Lump sum you can withdraw
Tax-free at maturity
₹45,58,651
Locked into an annuity
₹22,793
Monthly pension
Taxed as income
Most NPS calculators report one large number and stop, which is misleading, because you cannot take it all. At sixty, at least forty percent of the corpus must be used to buy an annuity — only the rest is withdrawable. This projects the corpus from your monthly contribution, then splits it the way the rules require and shows the monthly pension the annuity portion would actually pay. That second figure is usually the one that changes how people think about their contribution.
The number that matters is the pension, not the corpus
A projected corpus of ₹2 crore sounds like a comfortable retirement until you follow the rules through. Forty percent — ₹80 lakh — buys an annuity, and at six percent that produces about ₹40,000 a month before tax. The remaining ₹1.2 crore is yours as a lump sum. Whether that is enough depends entirely on what ₹40,000 buys in thirty years, which is a very different question from whether ₹2 crore sounds large today. Seeing both figures side by side is the point of splitting them here.
Where the tax benefit actually sits
NPS carries a deduction most other instruments do not: ₹50,000 under Section 80CCD(1B), over and above the ₹1.5 lakh limit of 80C. For someone at a thirty percent marginal rate that is worth ₹15,600 a year in tax saved, which is a real return on its own before any market movement. Salaried employees can also have employer contributions deducted under 80CCD(2), which does not count against either limit. These deductions are available only under the old regime, apart from the employer contribution, which survives in the new one.
Reading a thirty-year projection honestly
Any projection over three decades is an argument, not a forecast. Small changes compound dramatically: a contribution of ₹5,000 a month at ten percent for thirty years produces roughly twice what the same contribution produces at eight percent. The sensible use of a calculator like this is comparative rather than predictive — run your number at eight, ten and twelve percent, and note the shape of the difference. That spread tells you more about the decision in front of you than any single projection can.
Frequently asked questions
- Why must 40% go into an annuity?
- NPS is designed as a pension rather than a savings pot, so the rules require at least forty percent of the corpus to buy a regular income for life. You can use more if you want a larger pension and a smaller lump sum.
- Is the lump sum taxable?
- No. The withdrawable portion, up to sixty percent, is tax-free at maturity. The pension from the annuity is taxable as income in the year you receive it.
- What return should I assume?
- NPS funds have historically delivered roughly 9 to 12% for equity-weighted allocations and 7 to 9% for debt-heavy ones. Your mix changes with age under the auto choice, so a single rate across thirty years is a simplification — run it twice, high and low, and treat the gap as the real range.
- Can I withdraw before 60?
- Partially, after three years, up to 25% of your own contributions and only for specified reasons such as education, marriage, illness or buying a home. Exiting fully before 60 requires 80% to go into an annuity, which is deliberately unattractive.
- How does NPS compare with PPF?
- PPF gives a guaranteed, tax-free return and full access at maturity. NPS has no guarantee, is partly locked into an annuity, but carries equity exposure and an extra ₹50,000 deduction under 80CCD(1B) over and above 80C.
- What annuity rate is realistic?
- Annuity rates in India have generally been between 5.5% and 7%, depending on the option chosen. A plan that returns the purchase price to your nominee pays less than one that does not.
- Is my data stored?
- No. Everything is computed in this page and nothing about your contributions is transmitted.