NPS Calculator: The National Pension Scheme (NPS) Calculator helps you project your retirement corpus based on:
✅ Monthly Contributions
✅ Expected Returns
✅ Investment Tenure
It is a crucial tool for retirement planning, helping you estimate your pension wealth under the NPS (Tier I & Tier II) accounts.
How NPS Returns are Calculated
NPS Formula (Future Value of Annuity):
FV=P×(1+r)n−1r×(1+r)
FV = Future Value (Maturity Corpus)
P = Monthly Contribution
r = Expected Monthly Return (Annual Return ÷ 12)
n = Total Number of Contributions (Years × 12)
Example Calculation:
Monthly Contribution (P): ₹5,000
Expected Annual Return (r): 10%
Tenure (n): 30 years (360 months)
Step 1: Convert annual return to monthly return
r=10%12≈0.00833 (0.833% per month)
Step 2: Apply NPS formula
FV=5,000×(1+0.00833)360−10.00833×(1+0.00833)≈∗∗₹1.14Crore∗∗
Total Invested Amount:
₹5,000×360=∗∗₹18Lakhs∗∗
Estimated Returns:
₹1.14Crore−₹18Lakhs=∗∗₹96Lakhs∗∗
Benefits of Using an NPS Calculator
✅ Estimates Retirement Corpus – Plan your pension fund
✅ Adjustable Contributions – See how increasing SIPs boosts returns
✅ Tax Efficiency – NPS offers ₹50,000 additional deduction (Sec 80CCD(1B))
✅ Compounding Effect – Long-term wealth growth projection
✅ Free & Easy – No registration required
NPS Withdrawal Rules (2024)
| Withdrawal Stage | Permitted Amount | Tax Implications |
|---|---|---|
| At 60 (Maturity) | 60% lump sum (tax-free) + 40% annuity (taxable as income) | Partial tax exemption |
| Early Exit (After 10 yrs) | 20% lump sum (tax-free) + 80% annuity | Taxable as per slab |
| Premature (Before 10 yrs) | Only 20% lump sum (taxable) | Full taxation |
Factors Affecting NPS Returns
| Factor | Impact on Returns |
|---|---|
| Equity Allocation (E Tier) | Higher risk but better returns (up to 75%) |
| Government Bonds (G Tier) | Lower risk, stable returns |
| Contribution Amount | Higher SIP → Larger corpus |
| Tenure | Longer duration → Higher compounding |
NPS vs Other Retirement Plans
| Feature | NPS | PPF | EPF | Mutual Funds |
|---|---|---|---|---|
| Returns | 8-12% | 7.1% | 8.15% | 12-15% |
| Tax Benefit | ₹2 Lakh (80C + 80CCD(1B)) | ₹1.5 Lakh (80C) | ₹1.5 Lakh (80C) | ₹1.5 Lakh (80C) |
| Liquidity | Lock-in till 60 | 15-year lock-in | Withdrawal allowed | No lock-in |
| Annuity Compulsion | 40% at maturity | No annuity | No annuity | No annuity |
FAQs on NPS Calculator
1. What is the best age to start NPS?
Early 20s to 30s (Longer tenure = Higher compounding).
2. Can I increase my NPS contribution later?
Yes, you can increase SIPs anytime.
3. Is NPS better than mutual funds for retirement?
NPS offers tax benefits but has annuity rules. MFs offer liquidity but no pension guarantee.
4. What happens if I stop NPS contributions?
Account remains inactive but can be revived later.
5. How is NPS taxed at maturity?
60% lump sum = Tax-free | 40% annuity = Taxable as income.
Try Our Free NPS Calculator
Plan your retirement smarter with our NPS Calculator:
📌 Check different contribution levels
📌 Compare equity vs. debt returns
📌 Estimate tax benefits
Calculate Now & Secure Your Retirement!
Key Takeaways
NPS offers ₹50,000 extra tax deduction (80CCD(1B))
Equity (E) tier can give 10-12% returns
40% annuity compulsory at maturity
Start early for maximum compounding benefits