Why Use an NPS Calculator Online?
The National Pension Scheme (NPS) is a government-sponsored retirement planning vehicle designed to provide financial security post-retirement. By investing regularly during your working years, you build a massive retirement corpus thanks to market-linked returns and the power of compounding.
Our online NPS Calculator helps you project your total wealth at age 60. By adjusting your monthly contribution, you can see how much tax-free lumpsum you can withdraw and estimate your monthly pension amount. Plus, NPS investments offer exclusive tax benefits under Section 80CCD(1B) up to ₹50,000, over and above the standard 80C limit!
Frequently Asked Questions about National Pension System
What is the mandatory annuity percentage in NPS?
When you reach retirement age (usually 60), it is mandatory to use at least 40% of your total NPS corpus to purchase an annuity, which provides your regular monthly pension. The remaining 60% can be withdrawn as a tax-free lumpsum.
How does the NPS calculator estimate my monthly pension?
First, it calculates your total corpus using the compound interest formula for SIPs. Then, it takes the annuity percentage (e.g., 40%) of that corpus and applies an expected annuity return rate (typically around 6% to 8% p.a.) to estimate your monthly payouts.
Are NPS maturity amounts tax-free?
Yes! The up to 60% lumpsum withdrawal you make at age 60 is completely exempt from income tax. However, the regular monthly pension you receive from the annuity portion is taxed according to your applicable income tax slab.