Secure your retirement with
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Calculate your National Pension System corpus at age 60, lumpsum withdrawal, and monthly pension.
| Age | Invested Amount | Est. Returns |
|---|
How NPS builds your retirement corpus
A low-cost, market-linked pension scheme regulated by PFRDA — with some of the best tax benefits available in India. Your money is professionally managed across equity, bonds, and government securities until you retire at 60.
no other instrument matches this
NPS asset classes & investment choices
NPS gives you control over where your money is invested — across four asset classes, through two distinct allocation strategies.
Your NPS contributions are invested across up to four distinct asset classes. You can tailor your allocation based on your risk appetite and years to retirement — a flexibility that no other government-backed savings scheme offers.
The two investment strategies — Active Choice and Auto Choice — give you full control or automatic age-based rebalancing. You can switch between them, or change your Pension Fund Manager, once per financial year at no charge.
| Your Age | Equity (E) | Corp Bonds (C) | Govt Sec (G) |
|---|---|---|---|
| Up to 35 | 75% | 10% | 15% |
| 40 | 55% | 10% | 35% |
| 45 | 35% | 10% | 55% |
| 50 | 15% | 10% | 75% |
| 55–60 | 5% | 5% | 90% |
NPS Tier I vs Tier II — know the difference
NPS has two account tiers with very different purposes. Opening both can give you a powerful combination of tax-locked retirement savings and flexible liquid investing.
₹1,000/year minimum
Partial exit in specific cases
Up to ₹2L deduction
40% mandatory annuity
No minimum yearly requirement
NPS vs other retirement & tax-saving options
How NPS stacks up against PPF, ELSS, EPF, and traditional pension plans across the metrics that matter most for retirement planning.
| Instrument | Returns | Lock-in | Risk | Tax deduction | Pension / Annuity |
|---|---|---|---|---|---|
| NPS Tier I 🏆 | 10–13% (market) | Till age 60 | Low–moderate | ₹2L (80C + 80CCD1B) | Built-in annuity |
| PPF | 7.1% fixed | 15 years | Zero | ₹1.5L (80C only) | No pension |
| EPF | 8.25% fixed | Till retirement | Zero | ₹1.5L (80C only) | EPS pension (small) |
| ELSS Mutual Fund | 12–15% (market) | 3 years | Market risk | ₹1.5L (80C only) | No pension |
| Traditional Pension Plan | 4–6% fixed | Till retirement | Zero | Varies | Guaranteed pension |
| Mutual Fund SIP | 12–15% (market) | No lock-in | Market risk | No deduction | No pension |
Who benefits most from NPS?
Start early — time is your biggest asset in NPS
Unlike most instruments, NPS is locked until age 60 — which means the younger you start, the more years of compounding you're locking in. The difference between starting at 25 vs 35 isn't 10 years — it's a potential difference of ₹2–3 Crore in final corpus at the same monthly investment.
This is because of the compounding snowball: by year 20, the interest earned on your accumulated corpus starts to dwarf your fresh contributions. In NPS equity funds, ₹5,000/month invested from age 25 at 11% p.a. grows to ₹3.63 Crore by age 60 — with only ₹21L contributed in 35 years.
The mandatory annuity structure also means NPS forces you to maintain a retirement income stream — making it less likely you'll spend down your corpus prematurely, a real behavioural advantage over a simple mutual fund SIP.
Withdrawal, partial exit & premature closure rules
NPS has a strict lock-in, but important exceptions allow access to your money in specific situations. Understanding these helps you plan around the long tenure.
4 strategies to get the most from your NPS
How to open an NPS account
Opening an NPS Tier I account takes about 20 minutes online and can be done entirely without visiting a branch — all you need is Aadhaar, PAN, and a bank account.
Frequently asked questions
Everything you need to know about NPS — rules, tax benefits, withdrawals, and common edge cases.
Yes. At age 60, you can withdraw up to 60% of your total NPS corpus as a lump sum and this entire amount is completely tax-free under Section 10(12A) of the Income Tax Act. There is no capital gains tax, no TDS, and no requirement to declare it as income. The remaining 40% used to buy the annuity is also not taxable at the time of purchase — only the monthly pension income received thereafter is taxed as per your income slab in retirement.
Yes, and this is one of the most misunderstood aspects of NPS. Your NPS contribution can be claimed under 80CCD(1) which is part of the overall 80C limit of ₹1.5L. Separately and additionally, up to ₹50,000 can be claimed under 80CCD(1B) — this is over and above the ₹1.5L ceiling and exclusive to NPS. In effect, you can claim a total of up to ₹2L in deductions from NPS across both sections. However, if you have already exhausted your ₹1.5L limit via PPF, ELSS, or other 80C instruments, you can still invest ₹50,000 in NPS and claim the 80CCD(1B) deduction separately.
Under the new tax regime (opted for FY 2024-25 onwards), Section 80C deductions — including 80CCD(1) for NPS — are not available. The exclusive 80CCD(1B) deduction of ₹50,000 is also not available under the new regime. However, the 80CCD(2) deduction for employer contributions to NPS (up to 14% of basic for government, 10% for others) remains available even under the new regime. This makes Corporate NPS with employer contributions uniquely valuable for salaried individuals who have switched to the new tax regime.
For NPS Tier I, the minimum contribution per financial year is ₹1,000 (revised from the earlier ₹6,000). If you fail to make the minimum contribution in a year, your account becomes "frozen" and you cannot make any further contributions or withdrawals until you reactivate it. Reactivation requires paying ₹100 as a penalty for each financial year the account was frozen, plus the outstanding minimum contributions for those years. Your existing corpus continues to earn returns even in a frozen account.
All PFRDA-registered PFMs invest in the same underlying asset classes (E, C, G, A) with similar mandates. Differences in returns across PFMs over long periods are generally small. As a practical guide: HDFC Pension Fund and Kotak Pension Fund have consistently shown competitive equity (E-class) returns over 5–10 year periods. SBI Pension Funds has the largest AUM and stability. The good news is you can switch your PFM once per financial year at no charge — so the initial choice is not irreversible. Compare trailing 5-year equity returns on the NPS Trust website before choosing.
In the unfortunate event of the NPS subscriber's death before age 60, the entire accumulated corpus is paid out to the nominee as a lump sum. Unlike the mandatory annuity rule that applies to living subscribers, there is no compulsion for the nominee to purchase an annuity. The nominee can either choose to withdraw the full amount as a lump sum or use part of it to purchase an annuity for themselves. The payout to the nominee is tax-free. This makes it essential to designate a nominee when opening NPS — and to update it if your family circumstances change.
Your retirement starts with one decision today
Every month you wait is a month of compounding you can never recover. The ₹50,000 80CCD(1B) benefit alone is worth starting for. Use the calculator above to see your corpus — then open your NPS account today.