What percentage of NPS corpus can I withdraw at retirement?

At NPS maturity (age 60), you can withdraw up to 60% of the corpus as a tax-free lump sum. The remaining 40% must be invested in an annuity plan to generate a regular monthly pension. If total corpus is less than ₹5 lakh, you can withdraw 100%.

Is NPS better than PPF?

NPS offers potentially higher returns (8-12% p.a. in equity funds) vs PPF's fixed 7.1% p.a. NPS also offers an additional ₹50,000 tax deduction under 80CCD(1B) over the ₹1.5L 80C limit. However, 40% of NPS must go to annuity (taxable pension), while PPF is fully tax-free. NPS suits aggressive, long-horizon investors; PPF suits conservative investors.

What is the NPS annuity rate?

NPS annuity rates depend on the Annuity Service Provider (ASP) and plan chosen. Typical rates range from 5% to 7% p.a. on the annuity corpus. Monthly pension = (Annuity Corpus × Annuity Rate%) ÷ 12. Annuity income is taxable as per your income tax slab.

NPS Calculator India – National Pension Scheme Corpus & Pension

Contribution Details

Monthly Contribution

₹

₹500₹1L

Current Age

yrs

18 yrs59 yrs

Expected Annual Return

6%14%

Annuity Rate (p.a.)

4%9%

Rate offered by Annuity Service Provider (ASP) on the 40% annuity corpus.

Annuity Allocation

40% (min)100%

Minimum 40% must go to annuity as per PFRDA rules. Remaining is your lump-sum.

Total NPS Corpus at 60

₹0

after 0 years of contribution

Total Invested

₹0

Wealth Gained

₹0

Lump Sum (tax-free)

₹0

60% of corpus

Monthly Pension

₹0

annuity corpus: ₹0

Corpus Breakdown

Lump Sum Withdrawal ₹0 (60%)

Annuity Corpus ₹0 (40%)

Total Invested ₹0

Monthly pension (annuity income) is taxable as per your income tax slab at retirement.

Year-by-Year NPS Growth

Cumulative corpus at end of each year

Year	Age	Invested (Cumul.)	Returns	Corpus

How is NPS Corpus Calculated?

NPS corpus grows through monthly contributions compounded at the expected rate of return:

Corpus = P × [(1+r)ⁿ − 1] / r × (1+r)

Where P is monthly contribution, r is monthly rate (annual ÷ 12 ÷ 100), n is total months. Returns vary based on asset allocation (Equity/Corporate/Govt).

Equity (E)

~12%

Historical

Corp Bond (C)

~9%

Historical

Govt Sec (G)

~8%

Historical

NPS Tax Benefits

Section 80CCD(1) — ₹1.5 Lakh

NPS contributions up to 10% of salary (or 20% for self-employed) qualify under 80CCD(1), within the ₹1.5L 80C limit.

Section 80CCD(1B) — Additional ₹50,000

Exclusive to NPS — additional ₹50,000 deduction over and above the ₹1.5L 80C limit. Max annual benefit: ₹2L.

At Maturity

60% lump-sum is tax-free. Monthly pension from the 40% annuity is taxable as income at retirement slab rate. New tax regime: no 80CCD deductions.

NPS vs PPF — Quick Comparison

Feature	NPS	PPF
Returns	8–12%*	7.1%
Lock-in	Till age 60	15 years
Extra deduction	+₹50,000	None
Maturity tax	60% tax-free	100% tax-free
Market risk	Yes (equity)	No (fixed)

* Equity fund historical; not guaranteed

NPS Example Calculations

₹5,000/mo · Age 30 · 10% return ₹1.14Cr

Lumpsum ₹68.4L · Pension ~₹22,800/mo

₹10,000/mo · Age 25 · 10% return ₹3.82Cr

Lumpsum ₹2.29Cr · Pension ~₹76,400/mo

₹5,000/mo · Age 30 · 12% return ₹1.76Cr

Lumpsum ₹1.06Cr · Pension ~₹35,200/mo

* Annuity at 6% p.a. on 40% corpus. Pension is taxable.

Frequently Asked Questions

Common questions about NPS and this calculator

How is NPS corpus calculated?

NPS uses the standard SIP future-value formula: FV = P × [(1+r)ⁿ − 1] / r × (1+r), where P is monthly contribution, r is monthly return (annual ÷ 12 ÷ 100), and n is total months. For example, ₹5,000/month at 10% for 30 years gives ≈ ₹1.14 crore.

What happens to NPS at age 60?

At age 60, you can withdraw up to 60% of the corpus as a tax-free lump sum. The remaining 40% must be invested in an IRDAI-approved annuity plan with a registered Annuity Service Provider (ASP) to receive a regular monthly pension. If the total corpus is less than ₹5 lakh, you can withdraw 100%.

Is NPS pension taxable?

The 60% lump-sum withdrawal at maturity is completely tax-free. However, the monthly pension received from the annuity is treated as income and taxed at your income tax slab rate during retirement. If you choose a larger annuity allocation (more than 40%), the additional pension is also taxable.

Can I withdraw NPS before 60?

Partial withdrawal (up to 25% of own contributions) is allowed after 3 years for specific purposes: higher education, marriage, home purchase, or critical illness. Premature exit before 60 requires 80% to go to annuity (only 20% as lump sum), except if corpus is less than ₹2.5 lakh — then 100% withdrawal is allowed.

Which NPS fund is best?

For long-term wealth creation (20+ years), the Equity (E) fund has historically given the highest returns (~10–12% p.a.). For moderate risk, opt for Active Choice with 75% Equity, 15% Corporate, 10% Government. For age 50+, Auto Choice (LC-25 or LC-50) gradually shifts to safer assets. Fund managers include SBI, UTI, LIC, HDFC, Kotak, and ICICI.

Is NPS available under the new tax regime?

Under the new tax regime (FY 2025-26), the 80CCD(1) and 80CCD(1B) deductions are not available. However, employer contributions to NPS (up to 14% of salary for government employees, 10% for private) are still exempt under Section 80CCD(2) in both regimes. If you opt for old regime, you can claim both 80CCD(1) and 80CCD(1B) deductions.

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