Estimate your National Pension System retirement corpus and monthly pension. Updated for December 2025 PFRDA withdrawal reforms.
This calculator projects your NPS corpus at retirement. Formula: future value of the monthly contribution (yours plus your employer's) compounded monthly at the return you expect, until your retirement age. It then splits the corpus into a lump sum and an annuity (at least 20% for non-government subscribers above Rs 12 lakh) and turns the annuity into a monthly pension at the annuity rate.
Sample values shown (age 30, Rs 5,000 a month from you and Rs 5,000 from your employer, 10% return). Change them to get your own number.
| Component | Amount | Notes |
|---|
The National Pension System is India's government-regulated, voluntary, defined-contribution retirement scheme managed by PFRDA (Pension Fund Regulatory and Development Authority). Launched in 2004 for government employees and opened to all citizens in 2009, NPS has grown into one of the most popular long-term retirement vehicles in India.
Any Indian citizen aged 18 to 70 can open an NPS Tier 1 account. NRIs and OCIs (Overseas Citizens of India) are also eligible. Government employees hired after January 2004 are enrolled compulsorily under NPS. Tier 1 is the primary retirement account with withdrawal restrictions; Tier 2 is a voluntary add-on savings account with no withdrawal lock-in but no tax benefit for private sector subscribers.
NPS is a defined-contribution scheme, meaning your corpus depends on how much you invest and what returns the pension fund managers generate. The corpus grows using the compound interest formula for a recurring annuity:
FV = P x ((1 + i)^n - 1) / i x (1 + i)
where P = total monthly contribution (employee + employer), i = annual return / 12, and n = total months invested. Contributions from both employee and employer are invested together and grow at the same rate.
NPS funds are managed by PFRDA-registered fund managers including SBI Pension Funds, LIC Pension Fund, HDFC Pension, ICICI Prudential, and others. Historical long-term equity fund returns have been 10-12% per annum; debt funds (government securities and corporate bonds) have returned 7-9% per annum.
Subscribers can choose between Auto Choice (age-based automatic rebalancing that reduces equity exposure as you age) and Active Choice (you set your own split across Equity, Corporate Debt, Government Securities, and Alternative Assets). Under Active Choice, equity can go up to 75% of the portfolio (50% for government subscribers).
A 30-year-old non-government employee puts in Rs 5,000 a month and the employer adds Rs 5,000, so P = Rs 10,000 a month for 30 years (360 months), at an assumed 10% a year (i = 10% ÷ 12).
Returns are not guaranteed. At 8% instead of 10%, the same contributions grow to roughly Rs 1.5 crore.
| Section | Benefit | Tax Regime | Limit |
|---|---|---|---|
| 80CCD(1) | Employee self-contribution deduction | Old regime only | Up to 10% of basic salary + DA, within the overall Rs 1.5 lakh cap of Section 80CCE |
| 80CCD(1B) | Additional self-contribution deduction | Old regime only | Up to Rs 50,000 over and above the Rs 1.5 lakh limit (total NPS self-contribution deduction can reach Rs 2 lakh) |
| 80CCD(2) | Employer NPS contribution deduction | Both old and new regime | New regime: up to 14% of salary (basic + DA) for all employees. Old regime: 14% for central and state government employees, 10% for others. Employer contributions to PF, NPS and superannuation above Rs 7.5 lakh a year in total are taxable as a perquisite. |
The new tax regime has been the default since FY 2023-24 (Finance Act 2023). Under the new regime, self-contributions to NPS (80CCD(1) and 80CCD(1B)) are not deductible, but employer contributions under 80CCD(2) remain deductible. For salaried employees with employer NPS support, negotiating a higher employer NPS contribution can reduce taxable CTC under the new regime.
PFRDA notified significant changes through the NPS Exit and Withdrawal Amendment Regulations 2025 in December 2025. The new rules are tiered by corpus size and subscriber type:
| Corpus at Retirement | Non-Govt Subscriber | Government Employee |
|---|---|---|
| Up to Rs 8 lakh | 100% lump sum withdrawal allowed | 100% lump sum withdrawal allowed |
| Rs 8 lakh to Rs 12 lakh | Up to Rs 6 lakh lump sum; balance via Systematic Lump Sum Withdrawal (SLW) over min 6 years, or annuity, or both | Same as non-govt |
| Above Rs 12 lakh | Up to 80% as lump sum; minimum 20% to purchase annuity | Up to 60% as lump sum; minimum 40% to purchase annuity |
This is where you need to be careful. PFRDA rules (retirement regulations) and Income Tax Act provisions are currently misaligned. Section 10(12A) of the Income Tax Act exempts 60% of the NPS corpus from tax at retirement for all subscribers. Even though PFRDA now allows non-government subscribers to withdraw up to 80%, the additional 20% (between the 60% tax-free limit and the 80% withdrawable amount) is taxable at your applicable income slab rate. The Ministry of Finance has not yet issued a corresponding amendment to bring the tax exemption in line with the 80% withdrawal limit.
The annuity income (monthly pension) is fully taxable as income from salary in the year of receipt, at your applicable slab rate.
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The NPS deductions on this page (80CCD(1), 80CCD(1B), 80CCD(2), 80CCE) and the 60% exemption (10(12A)) use the 1961 Act numbering most people know. The limits did not change for tax year 2026-27, but the section numbers did; use the official section navigator to find the new ones.
The minimum annual contribution to a Tier 1 account is Rs 1,000 per financial year. There is no upper cap on contributions. However, the tax deduction benefits are capped as described in the table above. If you do not contribute for a year, your account becomes dormant and a Rs 100 penalty per year of default is levied to reactivate it.
For non-government subscribers, the December 2025 amendment removed the 5-year minimum before a premature exit. If you exit before 60, at least 80% of the corpus must buy an annuity and up to 20% can be taken as a lump sum. If the total corpus is Rs 5 lakh or less, you can withdraw all of it. Government subscribers follow separate rules, so check with your nodal office or the PFRDA site.
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Disclaimer: This calculator is for informational purposes only. Returns are indicative and not guaranteed. Annuity rates vary by provider. Tax treatment depends on individual circumstances. Consult a financial advisor before making retirement decisions.
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