How much tax can I save by investing in NPS?

Under the Old Tax Regime, you can claim three deductions through NPS: 1) Section 80CCD(1): Up to ₹1.5 Lakh (covers the 80C umbrella). 2) Section 80CCD(1B): An additional exclusive ₹50,000 deduction. 3) Section 80CCD(2): Employer's contribution up to 10% of basic salary. By maxing out the exclusive ₹50k limit, someone in the 30% slab instantly saves ₹15,600 in taxes.

What is Active Choice vs Auto Choice in NPS?

Active Choice lets you manually decide your asset allocation across Equity (E - max 75%), Corporate Bonds (C), and Govt Securities (G). Auto Choice is a lifecycle fund where a fund manager automatically rebalances your portfolio: starting with high equity (up to 75% in Aggressive) and gradually shifting to safer government bonds as you approach age 60 to protect your corpus.

Can I withdraw from NPS before 60?

Yes, but with strict conditions. You can make a partial withdrawal (up to 25% of YOUR own contributions, not the employer's or the interest) after 3 years for specific reasons like children's education, marriage, house purchase, or critical medical emergencies. You are allowed a maximum of 3 partial withdrawals during the entire tenure.

What happens if I stop contributing to NPS?

The minimum mandatory contribution is just ₹1,00,0 per financial year for a Tier I account. If you fail to invest even ₹1,00,0, your account becomes frozen. To unfreeze it, you simply need to make the minimum contribution along with a small penalty of ₹100 per year of default. The money already invested continues to earn market returns even if frozen.

Is the NPS Monthly Pension (Annuity) taxable?

Yes. While the 60% lumpsum withdrawal at age 60 is completely tax-free, the remaining 40% must be used to purchase a an annuity from an insurance company. The monthly pension you receive from this annuity is treated as regular income and is taxed according to your income tax slab at retirement.

Can I withdraw 100% of my NPS corpus at age 60?

Generally, no. You MUST use at least 40% of the corpus to buy an annuity. However, there is an exception: If your total accumulated NPS corpus at age 60 is LESS than ₹5,00,000 (₹5 Lakhs), the PFRDA rules allow you to withdraw the entire 100% amount as a lumpsum without buying any annuity.

What is the difference between NPS Tier 1 and Tier 2?

Tier 1 is the mandatory retirement account — it offers tax benefits, has a strict lock-in until age 60, and requires mandatory annuity purchase. Tier 2 is an optional add-on investment account — it offers no tax benefits (except for govt employees), but has no lock-in, meaning you can deposit and withdraw money on any business day, much like a regular mutual fund.

Which pension fund manager is best for NPS?

There are currently 10 private and govt Pension Fund Managers (PFMs) like SBI, HDFC, ICICI, LIC, UTI, etc. Historically, HDFC and ICICI have shown excellent performance in the Equity scheme, while SBI/LIC lead in Govt securities. You are allowed to change your PFM once every financial year without any tax implications or exit loads if you are unhappy with their performance.

STOCKCALC.IN

NPS Calculator: Custom/month - Pension Planner

Customized NPS Plan

Reviewed by Mahavir Hirani, Financial Expert

Calculate National Pension System returns for Custom monthly contribution. Check tax benefits and retirement corpus.

Current Age

Retirement

Monthly Investment

₹

Returns

Annuity

Total Pension Corpus

₹1,13,96,627

Wealth at age 60 with 10% returns.

Monthly Pension

₹22,793

Yielding 6% annuity.

Lumpsum Out

₹68,37,976

60% Tax-free lumpsum

Tax Saver

₹50,000 Extra

Additional tax benefit under Sec 80CCD (1B).

Corpus Anatomy

Invested

16%

Earnings

84%

Expert Tip

Aggressive Lifecycle

Use the "Aggressive (LC75)" choice if you are under 35. It ensures maximum equity exposure for high-velocity wealth compounding before tapering off.

Retirement Pipeline

Retirement Corpus Targets

₹1 Crore Retirement Plan ₹2 Crore Retirement Plan ₹3 Crore Retirement Plan ₹5 Crore Wealth Blueprint ₹10 Crore Ultra Portfolio Early Retirement (FIRE) NPS

Monthly Contribution Goals

₹5,000/month NPS ₹10,000/month NPS ₹15,000/month NPS ₹50k Monthly Pension Goal ₹1 Lakh Monthly Pension Zero Tax Withdrawal Rules

Tax Strategy Elite

The 80CCD(1B) Advantage

Maximize your tax savings! NPS allows an exclusive additional deduction of ₹50,000 under Section 80CCD(1B), over and above the ₹1.5 Lakh limit of Section 80C. At the 30% tax bracket, this simple investment saves you an extra ₹15,600 in taxes every single year!

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Wealth ToolOld vs New Tax Regime

Section 80CCD(1B): The Exclusive ₹50,000 Edge

NPS is the only investment in India that offers an additional tax deduction of ₹50,000 over and above the ₹1.5 Lakh limit of Section 80C. For someone in the 30% tax bracket, this means an instant tax saving of ₹15,600 every year.

Active Choice vs Auto Choice Strategy

NPS offers two ways to manage your portfolio:

The 60:40 Maturity Rule

Upon reaching age 60, you can withdraw up to 60% of your corpus tax-free. The remaining 40% must be used to buy an annuity (pension plan) from a PFRDA-approved insurance company. This ensures you have both a large lumpsum for goals and a monthly paycheck for life.

Frequently Asked Questions

⚠️ Disclaimer

The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.

Verified Contributor

NPS Calculator: Custom/month - Pension Planner analyzed by Mahavir Hirani

I verified this calculation against the April 2026 Fiscal Cycle. If you have questions about the logic, reach out via the Author Page.

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₹50,000 Extra Deduction

NPS allows an exclusive ₹50,000 deduction under Sec 80CCD(1B), over and above 80C. This is a must-use for high-bracket taxpayers.

Aggressive Allocation

At age 30, you can opt for 75% Equity (E). This could potentially boost your returns to 12%+, increasing your corpus.

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NPS Calculator: Custom/month - Pension Planner

In Hindi (हिन्दी में पढ़ें)

₹50,000 Extra

Corpus Anatomy

Expert Tip

Aggressive Lifecycle

Retirement Pipeline

Retirement Corpus Targets

Monthly Contribution Goals

The 80CCD(1B) Advantage

Strategy Links

Section 80CCD(1B): The Exclusive ₹50,000 Edge

Active Choice vs Auto Choice Strategy

The 60:40 Maturity Rule

Frequently Asked Questions

How much tax can I save by investing in NPS?

What is Active Choice vs Auto Choice in NPS?

Can I withdraw from NPS before 60?

What happens if I stop contributing to NPS?

Is the NPS Monthly Pension (Annuity) taxable?

Can I withdraw 100% of my NPS corpus at age 60?

What is the difference between NPS Tier 1 and Tier 2?

Which pension fund manager is best for NPS?

⚠️ Disclaimer

NPS Calculator: Custom/month - Pension Planner analyzed by Mahavir Hirani

Institutional Tool Suite

₹50,000 Extra Deduction

Aggressive Allocation

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₹50,000 Extra Deduction

Aggressive Allocation

Popular NPS Calculations