NPS Calculator (India) — Pension at 60, 80CCD(1B) Extra ₹50K

Your corpus splits at 60 — the 60/40 rule

At age 60, current regulation requires at least 40% of your NPS corpus to buy an annuity that pays your pension for life. Up to 60% can be withdrawn as a lump sum, tax-free. The calculator assumes this minimum split, but you may choose to annuitise more of your corpus for a larger monthly pension.

The annuity rate is your pension's real lever

The calculator uses two rates. The expected return rate (9% default) governs how your contributions grow during your working years. The expected annuity rate (6% default) is what an insurer will pay you afterwards — typically much lower because insurers factor in costs and longevity risk. This rate is set at purchase time, not today, so any projection is a scenario. Try running lower annuity rates to see how sensitive your pension is to that key assumption.

Tax treatment: deductions and income

Contributions qualify for tax deduction under Section 80CCD(1) within the overall 80C limit, plus an additional deduction under Section 80CCD(1B). Employer contributions under Section 80CCD(2) sit outside the 80C ceiling. The 60% lump sum withdrawal is tax-free at exit. The annuity pension is taxable income in the year you receive it — this is often overlooked. Ceilings and rules are set by statute and revised from time to time, so check the current position before relying on a figure. To weigh NPS against a fixed-return alternative, the PPF maturity calculator models the other side of that choice.

What this calculator assumes

NPS returns are market-linked and not guaranteed. The calculator assumes constant monthly returns and a level contribution with no step-up. The annuity is modelled as a level rate for life, not accounting for variants like joint-survivor or inflation-linked annuities. Early exit before 60 has separate restricted rules. Rules and rates change. Confirm the latest with the PFRDA or a financial professional before making any decision.