How is NPS pension calculated?

Your monthly NPS contributions grow with market-linked returns until you turn 60, forming your corpus. At retirement you can withdraw up to 60% as a tax-free lump sum, and at least 40% must be used to buy an annuity, which pays your monthly pension. The pension equals the annuitised amount multiplied by the annuity rate, divided by twelve.

How much of NPS can I withdraw at 60?

At maturity you can withdraw up to 60% of your NPS corpus as a lump sum, which is tax-free under current rules. The remaining 40% or more must be used to purchase an annuity that provides your regular pension income.

Is NPS a good retirement investment?

NPS is a low-cost, market-linked retirement scheme with extra tax benefits under Section 80CCD(1B). It suits disciplined long-term retirement saving, though a portion of the corpus must be annuitised and pension income is taxable. Whether it fits you depends on your goals and overall plan.

NPS Calculator

Your NPS pension & corpus at 60

Q: How much pension will I get from NPS?

It depends on your monthly contribution, the years until you turn 60, your expected return, how much of the corpus you annuitise, and the annuity rate. For example, investing 5,000 rupees a month from age 30 at a 10% return could build a corpus of over 1 crore, giving a tax-free lump sum of around 68 lakh and a monthly pension of roughly 25,000 rupees, depending on assumptions.

Estimate your National Pension System corpus, tax-free lump sum and monthly pension.

Your NPS corpus at 60

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Tax-free lump sum

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Monthly pension

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Figures are indicative estimates for planning only, based on the inputs and assumptions you provide, and are not guaranteed returns or financial advice. NPS returns are market-linked; actual corpus, lump sum, annuity rates and pension depend on fund performance, the annuity chosen and rules at the time.

📊 How your NPS pension is calculated

The National Pension System turns your regular contributions into a retirement corpus, part of which becomes a lifelong pension:

Build the corpus. Your monthly contribution is invested at your expected return, compounding every month until you turn 60 — the future value of a monthly investment.
Split at retirement. At 60 you can take up to 60% as a tax-free lump sum. At least 40% must be annuitised — used to buy a pension. You choose how much (40–100%) goes to the annuity.
Convert to pension. The annuitised amount buys an annuity that pays a monthly pension equal to that amount times the annuity rate, divided by twelve.

In finance terms, the corpus is the future value of a monthly annuity-due at your expected return; the pension is the annuitised portion multiplied by the annuity rate. A higher return or an earlier start dramatically increases the corpus thanks to compounding.

NPS Calculator: estimate your National Pension System returns

The National Pension System (NPS) is a government-backed, market-linked retirement scheme open to all Indian citizens. You contribute regularly during your working years, the money is invested across equity and debt, and it grows into a corpus by the time you turn 60. This NPS calculator estimates that corpus, the tax-free lump sum you can withdraw, and the monthly pension your annuity will pay — all from a few simple inputs.

How the NPS calculator works

It compounds your monthly contribution at your expected return until age 60 to project your total corpus. It then applies the NPS rules: up to 60% can be withdrawn as a tax-free lump sum, while the portion you choose to annuitise (at least 40%) is converted into a lifelong monthly pension at your chosen annuity rate. Adjust any input to instantly see how it changes your corpus and pension.

Tax benefits of NPS

NPS offers some of the best tax benefits available to retirement savers in India. Contributions qualify for deduction under Section 80CCD(1) within the overall 80C limit, plus an additional ₹50,000 deduction under Section 80CCD(1B) over and above 80C. The 60% lump sum at maturity is tax-free; only the pension income is taxed as per your slab in the year you receive it.

NPS, pension and retirement planning together

NPS is one strong pillar of retirement, but rarely the whole plan. Use our retirement calculator to size the total corpus you need, this NPS calculator to see what NPS will contribute, and our pension calculator to check the income any corpus can generate. Together they show whether NPS alone gets you there, or whether you should add a dedicated pension or investment plan.

How much pension will I get from NPS?

It depends on your contribution, years to 60, expected return, how much you annuitise and the annuity rate. As an example, ₹5,000 a month from age 30 at a 10% return could build a corpus of over ₹1 crore, giving a tax-free lump sum of around ₹68 lakh and a monthly pension near ₹25,000 — figures that rise sharply the earlier you start.

How much of my NPS can I withdraw at 60?

Up to 60% of your NPS corpus can be withdrawn as a lump sum at maturity, and this is tax-free under current rules. At least 40% must be used to purchase an annuity that provides your monthly pension.

Can I contribute more than the minimum to NPS?

Yes. There is no upper limit on NPS contributions, and contributing more — especially early — significantly increases your final corpus and pension because of compounding. Use the calculator above to see the impact of raising your monthly amount.