NPS Calculator
The National Pension System (NPS) is a government-backed voluntary pension scheme for Indian citizens. Contributions grow through market-linked investments until age 60, after which a portion is taken as a lump sum (tax-free) and the rest buys a monthly annuity (pension).
Frequently Asked Questions
What is NPS and how is it different from EPF?+
NPS (National Pension System) is a voluntary, market-linked pension scheme where returns depend on the performance of underlying equity and debt funds. EPF (Employee Provident Fund) is a defined-contribution scheme with a government-declared fixed interest rate. NPS has higher potential returns but also market risk; EPF is guaranteed.
What are the tax benefits of NPS?+
Contributions to NPS qualify for deduction under Section 80CCD(1) up to 10% of salary (within the ₹1.5L 80C limit), and an additional ₹50,000 under Section 80CCD(1B) — this is over and above the 80C limit, making it a powerful tax-saving tool.
How much of the NPS corpus is tax-free at maturity?+
At retirement (age 60), 60% of the corpus can be withdrawn as a lump sum — this is completely tax-free. The remaining 40% (minimum) must be used to purchase an annuity, and the monthly pension received from the annuity is taxable.
Can I withdraw from NPS before retirement?+
Partial withdrawals of up to 25% of your own contributions are allowed after 3 years for specific purposes (children's education/marriage, home purchase, critical illness treatment). Premature exit before 60 requires at least 80% of the corpus to be annuitised.