Estimate your National Pension System retirement corpus and monthly pension
| Age | Contribution (Year) | Corpus at Year End |
|---|
NPS (National Pension System) is a government-sponsored pension scheme launched in 2004. It is a voluntary, long-term retirement savings scheme designed to enable systematic savings during the subscriber's working life. NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and offers market-linked returns through various fund options (Equity, Corporate Bonds, Government Securities, and Alternative assets).
The minimum contribution for NPS Tier-I account is Rs. 500 per contribution and a minimum of Rs. 1,000 per year to keep the account active. For Tier-II account, the minimum contribution is Rs. 250 per contribution with no minimum annual requirement. There is no maximum limit on contributions.
At maturity (age 60), 60% of the NPS corpus can be withdrawn as a lump sum completely tax-free. The remaining 40% (minimum) must be used to purchase an annuity plan from an empanelled insurance company. The monthly pension received from the annuity is taxable as per your applicable income tax slab rate.
Under Section 80CCD(1B) of the Income Tax Act, NPS subscribers can claim an additional tax deduction of up to Rs. 50,000 per financial year. This is over and above the Rs. 1.5 lakh deduction available under Section 80C/80CCD(1). This benefit is available only under the old tax regime, allowing a total NPS-related deduction of up to Rs. 2 lakh.
Partial withdrawal is allowed after 3 years of subscription for specific purposes such as children's higher education, marriage, home purchase/construction, or treatment of critical illnesses. Up to 25% of self-contributions can be withdrawn, with a maximum of 3 partial withdrawals allowed during the entire subscription period. For premature exit (before age 60), if the corpus is above Rs. 2.5 lakh, at least 80% must be used to purchase an annuity and only 20% can be taken as lump sum.