NPS Calculator

What is NPS (National Pension System)?

The National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). It aims to provide retirement income to all citizens of India. NPS encourages systematic savings during one's working life.

Key Features of NPS

• Eligibility: Available to all Indian citizens (resident or non-resident) aged 18-70 years.
• Account Types: Tier-I (mandatory, tax benefits, withdrawal restrictions) and Tier-II (voluntary, no tax benefits on investment, more withdrawal flexibility).
• Investment Options: Subscribers can choose their investment allocation across asset classes like Equity (E), Corporate Bonds (C), Government Securities (G), and Alternative Investment Funds (A). There are Active Choice (subscriber decides allocation) and Auto Choice (allocation based on age) options.
• Portability: The NPS account (PRAN - Permanent Retirement Account Number) is unique and portable across jobs and locations.
• Withdrawal Rules (Tier-I): At retirement (usually 60), at least 40% of the corpus must be used to purchase an annuity (providing regular pension). The remaining 60% can be withdrawn lump sum, tax-free. Partial withdrawals are allowed for specific purposes after 3 years.
• Tax Benefits: Offers tax deductions under Section 80CCD(1) (up to ₹1.5 Lakh within 80C limit), Section 80CCD(1B) (additional ₹50,000), and Section 80CCD(2) (employer contribution). The 60% lump sum withdrawal at retirement is tax-free. Annuity income is taxed as per slab rates.

Calculator Simplification

This calculator provides a **highly simplified** estimate of the potential corpus. It uses the future value of an annuity formula assuming a constant annual contribution and a fixed average rate of return.

**It does NOT account for:** Specific asset allocation choices (E, C, G, A), varying fund manager performance, scheme charges (fund management, custodian, etc.), the mandatory annuity purchase requirement at retirement, or the tax implications of annuity income.

Disclaimer: This calculator provides a basic projection for informational purposes only. Actual NPS returns depend heavily on market conditions, chosen asset allocation, fund manager performance, and applicable charges. The final retirement income will also depend on annuity rates prevailing at the time of retirement. Consult the official NPS website (PFRDA/NSDL) and a financial advisor for detailed information and personalized retirement planning.