The National Pension System (NPS) is a government-backed, market-linked retirement savings scheme open to all Indian citizens, offering a combination of tax benefits during the accumulation phase and a structured payout at retirement. Contributions made to NPS are invested across a mix of equity, corporate bonds, and government securities, based on your chosen allocation or a default lifecycle strategy that automatically shifts towards safer assets as you age.
At retirement (age 60), NPS rules require that at least 40% of your accumulated corpus be used to purchase an annuity (which provides you a regular monthly pension for life), while up to 60% can be withdrawn as a tax-free lump sum. This calculator projects your total corpus at retirement based on your monthly contribution, years remaining until retirement, and an assumed rate of return, then estimates your monthly pension based on your chosen annuity rate.
NPS contributions offer attractive tax benefits — up to ₹1.5 lakh under Section 80C (within the overall limit) and an additional ₹50,000 exclusively for NPS under Section 80CCD(1B), making it one of the more tax-efficient long-term retirement options available, particularly under the Old Tax Regime.
Beyond the Section 80C limit, NPS offers an exclusive additional deduction of up to ₹50,000 under Section 80CCD(1B), available only under the Old Tax Regime.
No — you must use at least 40% of your accumulated corpus to purchase an annuity for regular pension income; the remaining amount (up to 60%) can be withdrawn as a lump sum, which is currently tax-free.
Yes, the regular pension income you receive from your NPS annuity is taxable as income in the year you receive it, at your applicable slab rate.
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