Is the 60% lump sum withdrawal really tax-free?

Under current rules, up to 60% of the NPS corpus withdrawn as a lump sum at retirement is exempt from tax. Tax rules can change, so confirm the applicable treatment at the time you actually withdraw, and consult a tax professional for your specific situation.

Can I choose my own asset allocation in NPS?

Yes. NPS offers "Active Choice," where you set your own split across equity, corporate bonds and government securities (subject to caps on equity exposure), and "Auto Choice," where the allocation shifts toward safer assets as you age. Your choice directly affects the expected return you should assume in this calculator.

What happens if I retire or exit early?

Exiting before age 60 is treated as premature exit and comes with stricter annuitization rules — typically a larger share of the corpus (up to 80%) must go into an annuity, with a smaller lump sum available, and lower-value accounts may be paid out entirely as a lump sum. This calculator models a normal retirement-age exit only.

Is the pension amount fixed for life once the annuity is purchased?

It depends on the annuity option you choose. A simple "life annuity" option pays a fixed pension amount for as long as you live, based on the rate locked in when you buy it. Other options (such as annuity with return of purchase price, or annuity with annual increase) pay differently — check the specific terms of the annuity plan you select at retirement.

Why does this calculator assume a constant contribution and return?

It's a simplifying assumption to make long-term projection possible. In reality, your contribution amount is likely to increase over your career, and NPS returns will vary year to year with markets rather than staying constant. Use this calculator to compare scenarios (different contributions and rate assumptions) rather than to predict a single guaranteed outcome.

NPS Calculator

Estimate the retirement corpus your National Pension System (NPS) contributions could build, the 60% lump sum you can withdraw tax-free, the 40% that must go into an annuity, and the monthly pension that annuity might pay.

Current Age Years, 18-65

Monthly Contribution Your own + employer, if applicable

₹

Expected Annual Return NPS is market-linked (equity + debt) — this is an assumption, not a guarantee

Retirement Age Years, 60-75

Expected Annuity Rate Rate the annuity provider pays on the 40% annuity corpus — varies by provider and over time

Fill in the form and select "Calculate" to see your results here.

What is the NPS Calculator?

The National Pension System (NPS) is a voluntary, market-linked retirement savings scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). Subscribers contribute regularly into a mix of equity, corporate debt and government bond funds, and the accumulated corpus is used at retirement partly as a lump sum and partly to buy an annuity that pays a monthly pension for life. This calculator projects the corpus your regular contributions could build by your chosen retirement age, and estimates the resulting lump sum and pension based on the assumptions you enter.

Why NPS matters for retirement planning in India

NPS is one of the few retirement products in India that offers an additional tax deduction of up to ₹50,000 under Section 80CCD(1B), over and above the ₹1,50,000 limit under Section 80C. Combined with relatively low fund management charges and the discipline of long-term, market-linked investing, it's a common component of retirement planning alongside EPF and personal savings such as PPF or mutual fund SIPs. Because the corpus grows with equity and debt markets rather than a fixed rate, NPS returns are variable — this calculator lets you model different assumed rates so you can see a range of outcomes rather than relying on a single number.

How to use this calculator

Enter your current age and the age at which you plan to retire (NPS allows continuation up to age 75).
Enter your monthly contribution — include any employer contribution if you're on a corporate NPS model.
Enter an expected annual return. NPS returns depend on your chosen asset allocation across equity, corporate bonds and government securities, and will vary over your investing years — 8-10% is a commonly used long-term planning assumption, not a promised figure.
Enter an expected annuity rate — the rate an insurance company would pay on the annuity portion at the time you retire. This also varies by provider and by prevailing interest rates, so treat it as an assumption to test, not a quote.
Select "Calculate" to see your projected corpus, the 60% lump sum, the 40% annuity investment, and the estimated monthly pension.

Formula

Corpus at retirement = future value of a monthly SIP-style contribution, compounded at the expected annual return, over the number of years until retirement Lump sum withdrawal = 60% of corpus (currently tax-free on withdrawal) Annuity investment = 40% of corpus (mandatory annuity purchase) Estimated monthly pension = (Annuity investment × Annuity rate ÷ 100) ÷ 12

The corpus projection uses the same monthly-SIP future value formula used across Toolbeel Finance's investment calculators, applied at the start of each month. See the editorial policy for how calculation methods are documented and kept current.

Example

Consider a 30-year-old planning to retire at 60 (30 years of contributions), contributing ₹5,000 a month at an assumed 10% expected annual return. Compounding that monthly contribution over 30 years — using the effective monthly rate derived from the 10% annual assumption, the same convention the SIP Calculator uses — produces a projected corpus of approximately ₹1,03,96,464. Of this, 60% — about ₹62,37,878 — could be withdrawn as a lump sum, while the remaining 40% — about ₹41,58,585 — must be used to purchase an annuity. At an assumed 6% annuity rate, that annuity investment would pay an estimated monthly pension of roughly ₹20,793. Change the contribution amount, return assumption, or annuity rate in the calculator above to see how sensitive these figures are to each input.

Factors that affect your NPS outcome

Market-linked returns are never guaranteed. NPS invests across equity, corporate debt and government securities. Actual returns depend on market performance and your chosen asset allocation, and will vary year to year — this calculator uses a single constant rate as a simplifying assumption.
Mandatory annuitization. At least 40% of your corpus must be used to buy an annuity when you exit NPS at or after retirement age; only the remaining portion (up to 60%) can be taken as a lump sum.
Annuity rates fluctuate. The pension you actually receive depends on prevailing annuity rates offered by the insurance company you choose at the time you retire, which can differ meaningfully from rates available today.
Tax benefits. Contributions can qualify for deductions under Section 80CCD(1) (within the overall 80C limit) and an additional ₹50,000 under Section 80CCD(1B). Employer contributions under a corporate NPS model may have separate tax treatment under Section 80CCD(2).
Contribution consistency. This calculator assumes a constant monthly contribution for the entire period. Missed contributions, contribution increases, or partial withdrawals along the way will change your actual corpus.

Frequently Asked Questions

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This calculator provides an estimate based on the contribution, return and annuity rate assumptions you enter — it does not guarantee actual NPS performance, which depends on market conditions and the annuity provider you choose at retirement. It is not a substitute for professional financial advice. See our full disclaimer.

Last updated: 21 August 2026 · Calculation basis: Standard SIP-style compound-growth formula (effective monthly rate derived from your annual return assumption) for the accumulation phase, and a simple annuity-income projection for the pension phase, both using the contribution, return and annuity rate you enter.