Investing
NPS Calculator
National Pension System: tier-1 corpus, 60% tax-free lump sum, 40% annuity for monthly pension, plus the 80CCD(1B) extra tax saving.
Your numbers
years
years
₹
% p.a.
% p.a.
%
Your result
₹1.14 crore
At 10% returns, ₹5,000/month for 30 years builds a ₹1.14 crore corpus. At age 60: take ₹68.38 lakh (60%) as tax-free lumpsum, use ₹45.59 lakh (40%) to buy an annuity that pays you ₹22,793/month for life (taxable as income). Plus ₹15,000 of tax saving every year you contribute under 80CCD(1B).
- Total you invest
- ₹18 lakh
- Corpus at retirement
- ₹1.14 crore
- Tax-free lumpsum (60%)
- ₹68.38 lakh
- Annuity purchase (40%)
- ₹45.59 lakh
- Monthly pension (taxable)
- ₹22,793
- Yearly 80CCD(1B) tax saving
- ₹15,000
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Compare with your full retirement target
NPS alone is rarely enough. Run the Retirement Corpus Calculator to see how much more SIP you need on top.
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The three NPS tax breaks
- 80CCD(1): own contribution up to 10% of basic+DA, within the ₹1.5L 80C cap.
- 80CCD(1B): additional ₹50,000 above 80C, exclusive to NPS. The headline benefit.
- 80CCD(2): employer contribution up to 14% of basic+DA (10% private sector), over and above both caps.
Should you use NPS?
- Yes, if you are in the 20% or 30% slab and have not yet used the 80CCD(1B) ₹50,000 deduction. The tax break alone is a 30% bonus on the contribution.
- No, if you want full control over retirement asset allocation. NPS funds are reasonable but you cannot pick specific schemes the way you can with mutual funds.
- Probably no if you are in the new tax regime. Most NPS deductions are not available in the new regime; the structural lock-in still applies.