NPS Calculator
National Pension Scheme — lump sum + annuity split
30 years
₹5,000
10%
6%
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Corpus at age 60
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Lump sum (60%, tax-free)
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Annuity purchase (40%, mandatory)
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Est. monthly pension
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Total invested
The 40% annuity rule is the surprise
Most NPS calculators show you a huge corpus but forget that at retirement you're legally forced to buy an annuity with at least 40% of it. That annuity pays a monthly pension (6-8%/yr typical), taxed as income. The 60% lump sum is tax-free (Section 10(12A)).
Related tools
NPS in three quick rules
- Tax: 80CCD(1) under 80C's ₹1.5L + additional ₹50K under 80CCD(1B) — saves up to ₹15,600/yr for 30% bracket
- Lock-in: can't exit before 60 (except special circumstances) — genuinely locked money
- At 60: min 40% must buy an annuity (pension fund), the 60% rest is yours tax-free, full withdrawal only allowed if total corpus < ₹5L
Reality check: if you're in the 30% bracket, the ₹50K 80CCD(1B) deduction saves ₹15,600/yr — over 30 years that's ₹4.7L of pure tax savings, separate from investment growth. This is what makes NPS a strong Tier-1 choice for salaried investors.