Reviewed by Finin2min Editorial Desk · Last reviewed 12 August 2026
Project an NPS corpus, lump sum and indicative annuity using editable return, contribution step-up and annuity assumptions.
Project retirement corpus and pension
Projection
Projected retirement corpus
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Indicative monthly annuity
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Component
Amount
Indicative lump-sum portion
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Corpus allocated to annuity
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Total projected contributions
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NPS is market-linked. The return and annuity rate are assumptions, not guaranteed outcomes. Exit and annuitisation rules applicable on the exit date prevail.
Income-tax Act, 2025 note: The NPS deduction under Section 80CCD discussed above becomes Section 124 (read with Schedule XV) under the Income-tax Act, 2025, effective FY 2026-27. For FY 2025-26 and earlier, Section 80CCD remains the correct citation. Section numbering note: This page uses Income-tax Act, 1961 terminology for AY 2026-27 references. If applying the Income-tax Act, 2025 for a later year, verify the corresponding provision and exact wording from the official Gazette or Income Tax Department before citing a section number.
How This Is Calculated
This calculator projects your NPS corpus by compounding monthly contributions (with optional annual step-up) at your expected return rate until retirement age. At retirement, current NPS rules require a minimum 40% of the corpus to be used to purchase an annuity (providing regular pension income), while up to 60% can be withdrawn as a lump sum, which is fully tax-free. The annuity income itself is taxable as regular income when received.
Frequently Asked Questions
How much of my NPS corpus must go into an annuity at retirement?
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At least 40% of the accumulated NPS corpus must be used to purchase an annuity, which pays you a regular pension. The remaining amount, up to 60%, can be withdrawn as a lump sum.
Is the NPS lump-sum withdrawal at retirement taxable?
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No. The lump-sum portion withdrawn at retirement (up to 60% of the corpus) is fully tax-free. However, the pension received from the annuity portion is taxable as regular income in the year received.
What is the tax deduction available for NPS contributions?
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Individual contributions up to ₹50,000 are deductible under Section 80CCD(1B), over and above the ₹1.5 lakh Section 80C limit. Employer contributions to NPS are separately deductible under Section 80CCD(2), subject to salary-linked limits that differ between the old and new tax regimes — check the site's tax-regime comparison for the exact current percentages.
Can I choose how my NPS money is invested?
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Yes, within limits — NPS offers a choice between Active Choice (you set the equity/debt/government-securities/corporate-bond allocation, with equity capped by age-based rules) and Auto Choice (a lifecycle fund that automatically reduces equity exposure as you approach retirement).
Scope: Projects the retirement corpus accumulated under the National Pension System (NPS), based on contributions, assumed investment return, and the resulting mandatory annuity purchase and lump-sum withdrawal split at retirement.
Calculation logic
Project the corpus year by year, compounding monthly/annual contributions (employee, and employer where applicable) at the assumed rate of return for the asset allocation selected (equity/corporate debt/government securities mix).
At retirement (currently, normal exit at or after age 60), apply the mandatory annuitisation rule: at least 40% of the accumulated corpus must be used to purchase an annuity from an IRDAI-registered annuity service provider, with the remaining balance (up to 60%) available as a tax-free lump-sum withdrawal, per current PFRDA exit regulations.
Where the total corpus at exit is below the currently prescribed threshold (a lower-value exception in the PFRDA exit regulations), the entire corpus can be withdrawn as a lump sum without the mandatory annuitisation requirement.
Inputs and assumptions
Assumed investment returns for each asset class (equity, corporate bonds, government securities) are user-entered planning assumptions, not guaranteed or predicted returns — actual NPS returns vary with market performance and the specific pension fund manager selected.
Mandatory annuitisation percentage (40%) and lump-sum tax-exemption treatment follow the current PFRDA exit regulations and Income-tax Act provisions for NPS maturity.
Exclusions and edge cases
Does not itself compute the resulting monthly pension from the annuity purchase — the pension amount depends on the specific annuity plan and rates offered by the chosen annuity service provider at the time of purchase, which varies and is not predictable in advance.
Premature exit (before age 60) has a different, more restrictive annuitisation requirement (currently 80% mandatory annuitisation for premature exit, versus 40% for normal exit) — the calculator applies the correct rule based on the exit scenario selected.
Finin2min is not registered with the Securities and Exchange Board of India (SEBI) as an Investment Adviser or as a Research Analyst. This tool performs an arithmetic calculation on the figures you enter and is published for general information and educational purposes only. It is not investment advice, it is not personalised to your financial circumstances, objectives or risk tolerance, and it is not a recommendation to buy, sell or hold any security, scheme or product. Projected values are illustrative and follow directly from the assumptions you supply; actual returns will differ, and past performance does not indicate future results. Consider consulting a SEBI-registered Investment Adviser before acting on any investment decision.