PFRDA Pension Planning

NPS Calculator – National Pension System Pension & Corpus

Calculate your National Pension System (NPS) Tier 1 retirement corpus, 60% tax-free lump-sum withdrawal, 40% mandatory annuity pension, and Section 80CCD(1B) tax savings.

Quick Retirement Scenarios

1. Contribution & Age Timeline

Monthly investment amount, current age, and career step-up assumptions

Monthly Contribution (₹)

₹

Minimum ₹500 per contribution (₹1,000 annual minimum under Tier I)

Current Age (Years)

Planned Retirement Age (Years)

Annual Contribution Step-Up (%)

Projected annual percentage increase in your monthly NPS investment

2. Asset Allocation & Investment Choice

Effective Expected Return: 10.05% p.a.

Auto Life Cycle funds or Active Choice across equities and debt

Investment Choice Mode

Life Cycle Fund Type

3. Exit & Pension Settlement (PFRDA Reg. 3)

Annuity percentage allocation and expected pension rate

Corpus Allocated to Annuity (%)40% Annuity / 60% Lump Sum

Statutory minimum 40% required on normal exit at age 60

Expected Annuity Rate (% p.a.)

Prevailing pension annuity rate offered by Life Insurance ASPs (typically 6.0%)

Projected NPS Retirement Corpus

₹2,27,42,881

₹2.27 Cr at age 60

Invested (19.9%)

Wealth Growth (80.1%)

Total Principal Invested:₹45,18,276

Total Wealth Growth:+₹1,82,24,605

PFRDA Superannuation Settlement

Tax-Free Lump Sum (60%) (60%):₹1,36,45,729

100% Tax-Free under Section 10(12A)

Annuity Purchase (40%) (40%):₹90,97,152

Invested with ASP for lifelong monthly pension

Estimated Monthly Pension

₹45,486 / month

Annual Pension Income: ₹5,45,829 / year (at 6% annuity return)

🎯Section 80CCD(1B) Tax Deduction

Eligible for up to ₹50,000 / year exclusive additional tax deduction under Section 80CCD(1B) over and above Section 80C.

Year-by-Year NPS Wealth Accumulation Schedule

Projected annual contributions, compounding returns, and closing balances

Year	Age	Opening Balance	Annual Investment	Wealth Gain	Closing Balance
Year 1	28	₹0	₹60,000	+₹3,369	₹63,369
Year 2	29	₹63,369	₹63,000	+₹10,207	₹1,36,576
Year 3	30	₹1,36,576	₹66,156	+₹18,090	₹2,20,822
Year 4	31	₹2,20,822	₹69,468	+₹27,144	₹3,17,435
Year 5	32	₹3,17,435	₹72,936	+₹37,508	₹4,27,879
Year 6	33	₹4,27,879	₹76,584	+₹49,339	₹5,53,802
Year 7	34	₹5,53,802	₹80,412	+₹62,808	₹6,97,022
Year 8	35	₹6,97,022	₹84,432	+₹78,110	₹8,59,564
Year 9	36	₹8,59,564	₹88,656	+₹95,456	₹10,43,676
Year 10	37	₹10,43,676	₹93,084	+₹1,15,085	₹12,51,845
Year 11	38	₹12,51,845	₹97,740	+₹1,37,258	₹14,86,843
Year 12	39	₹14,86,843	₹1,02,624	+₹1,62,268	₹17,51,735
Year 13	40	₹17,51,735	₹1,07,760	+₹1,90,440	₹20,49,935
Year 14	41	₹20,49,935	₹1,13,148	+₹2,22,131	₹23,85,213
Year 15	42	₹23,85,213	₹1,18,800	+₹2,57,740	₹27,61,753

How it works

Governed by the Pension Fund Regulatory and Development Authority (PFRDA Exit Regulations, 2015 as amended). Subscribers contribute monthly to their Tier I retirement account across Asset Classes: Equity (Class E, up to 75%), Corporate Debt (Class C), Government Bonds (Class G), and Alternative Assets (Class A, up to 5%). Upon reaching superannuation age (default 60, extendable up to 70), statutory regulations mandate that at least 40% of the accumulated corpus must be utilized to purchase an annuity from an Annuity Service Provider (ASP) to guarantee lifelong monthly pension. Up to 60% of the corpus can be withdrawn as a tax-free lump sum under Section 10(12A). If the total accumulated corpus is ₹5,00,000 or less, the subscriber is permitted to withdraw 100% as a lump sum without purchasing an annuity.

Example

A 28-year-old subscriber contributing ₹5,000/month with an expected 5% annual step-up until retirement at age 60 under the Moderate Life Cycle Fund (LC50, ~10% weighted return) accumulates a total retirement corpus of ~₹1.88 Crores over 32 years (total contributions ~₹47.8 Lakhs, compound wealth gain ~₹1.40 Crores). At retirement with a 40% annuity split, the subscriber withdraws ~₹1.13 Crores (60%) as a completely tax-free lump sum and invests ~₹75.2 Lakhs (40%) into an annuity generating an estimated lifelong monthly pension of ~₹37,600/month (at 6.0% annuity rate).

Frequently asked questions

What is the mandatory annuity purchase rule under NPS?

Under PFRDA Exit Regulations, when a subscriber exits NPS at superannuation (age 60 or above), a minimum of 40% of the accumulated corpus must be used to purchase an immediate annuity from an approved Annuity Service Provider to yield regular pension. Up to 60% can be withdrawn as a lump sum.

Is the 60% NPS lump-sum withdrawal tax-free?

Yes. Under Section 10(12A) of the Income-tax Act, 1961, up to 60% of the total accumulated corpus withdrawn as a lump sum at superannuation is 100% exempt from income tax.

What is the small corpus exemption threshold?

Under revised PFRDA exit guidelines, if the total accumulated pension corpus is equal to or less than ₹5,00,000 at retirement, the subscriber has the option to withdraw 100% of the corpus as a lump sum without purchasing an annuity.

What extra tax deduction does NPS offer under Section 80CCD(1B)?

Section 80CCD(1B) provides an exclusive additional income tax deduction of up to ₹50,000 per financial year for contributions to NPS Tier I. This is over and above the ₹1,50,000 limit available under Section 80C, allowing total tax deductions of up to ₹2,00,000.

What is the difference between Auto Choice and Active Choice in NPS?

In Active Choice, the subscriber decides their own asset allocation across Equity (up to 75%), Corporate Debt, Government Bonds, and Alternative Assets (up to 5%). In Auto Choice, allocation is managed automatically through Life Cycle funds (LC75, LC50, LC25) that automatically reduce equity exposure as the subscriber ages.

Can I continue contributing to NPS after age 60?

Yes. Subscribers can defer both withdrawal and annuity purchase, or continue contributing to NPS up to the age of 70 years, allowing the accumulated corpus to continue compounding.