How the NPS calculator works
The National Pension System (NPS) is a market-linked retirement scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). You contribute while you work; at retirement, part of the corpus can be taken as a lump sum and the rest must buy an annuity, a policy from an insurer that pays you a regular pension.
- C = monthly contribution; i = expected yearly return ÷ 12 ÷ 100
- n = months until retirement. Contributions are assumed at the start of each month.
- With a yearly increase, each year's contributions are raised by that percentage and added up month by month.
Worked example
You are 30 and put ₹5,000 a month into NPS until 60, at an expected 10% a year. That's 360 contributions and ₹18,00,000 invested. With i = 0.10 ÷ 12:
| Non-government (80% lump sum) | Government (60% lump sum) | |
|---|---|---|
| Corpus at 60 | ₹1,13,96,627 | ₹1,13,96,627 |
| Lump sum | ₹91,17,301 | ₹68,37,976 |
| Annuity purchase | ₹22,79,325 | ₹45,58,651 |
| Monthly pension at 6% | ₹11,397 | ₹22,793 |
Raising the contribution by 5% every year takes the total invested to about ₹39.9 lakh and the corpus to about ₹1.80 crore. The lump-sum slider lets you weigh cash at retirement against a bigger pension: every percentage point moved to the annuity raises the monthly pension.
Exit rules: 80% or 60% lump sum
Under the exit rules as amended by PFRDA in December 2025, non-government subscribers (all citizens and corporate NPS) can take up to 80% of the corpus as a lump sum at normal exit, and at least 20% must buy an annuity. Government-sector subscribers keep the earlier rule: up to 60% as a lump sum, with at least 40% used for an annuity. Choose your subscriber type above; the slider's maximum changes to match. Rules can change, so check pfrda.org.in for the latest before you plan an exit.
Choosing the return and annuity rate
NPS money is invested in a mix of equity, corporate bonds and government securities, depending on the funds and allocation you pick, so returns aren't fixed. Try a cautious rate as well as a hopeful one. The annuity rate depends on the insurer, the annuity type (for example, with or without return of the purchase price to your nominee) and interest rates when you retire; a 6% estimate is only a starting point.
Tax
Your employer's NPS contribution is deductible under both the old and the new tax regime, within limits. Sources differ on how the lump sum and the pension are taxed after the 2025 changes, so this calculator shows amounts before tax: check the current tax treatment with a tax adviser before you decide. To see how deductions change your tax this year, use the income tax calculator.
Frequently asked questions
How much of my NPS corpus can I withdraw as a lump sum?
How is the NPS pension calculated?
What return should I assume for NPS?
Is the NPS lump sum tax-free?
Is the employer's NPS contribution tax-deductible?
Last updated . How we check our tools. Sources: PFRDA