Calculate Your Pension (NPS)

Use this calculator to estimate your pension under the National Pension System (NPS). Enter your monthly basic salary, dearness allowance (DA), years of contribution, age, employer contribution percentage (default 14% for central government), expected investment return rate, and annuity rate. The calculator estimates the corpus based on contributions and market-linked returns, with 40% used for an annuity-based pension and 60% as a lump sum. Note: Returns are market-linked, and actual pension depends on fund performance and annuity provider rates.

Monthly Basic Salary (₹): Dearness Allowance (%): Years of Contribution: Current Age (18–70): Employer Contribution (%): Expected Annual Return Rate (%): Annuity Rate (%): Calculate

About the National Pension System (NPS)

The National Pension System (NPS), regulated by the Pension Fund Regulatory and Development Authority (PFRDA), is a voluntary, defined-contribution pension scheme introduced by the Government of India to provide retirement income. Mandatory for central government employees (except armed forces) joining after January 1, 2004, it was opened to all Indian citizens in 2009. NPS aims to create a pensioned society through systematic savings invested in diversified portfolios (equity, corporate bonds, government bonds) by professional fund managers.

Eligibility

• Indian citizens (resident, non-resident, or OCI) aged 18–70 years.
• Mandatory for central government employees (post-January 1, 2004), state government employees (if adopted), and autonomous bodies.
• Voluntary for corporate employees and unorganized sector workers.
• Persons of Indian Origin (PIOs) and Hindu Undivided Families (HUFs) are not eligible.
• Only one NPS account per individual, linked to a Permanent Retirement Account Number (PRAN).

Key Features of the NPS

Account Types:

• Tier I: Mandatory, non-withdrawable pension account for retirement savings. Minimum contribution: ₹1,000/year.
• Tier II: Voluntary, withdrawable savings account, available only with an active Tier I account. Minimum balance: ₹2,000/year.

Contributions:

• Employee: 10% of basic salary + dearness allowance (DA).
• Employer: 14% (central government) or 10% (corporates) of basic salary + DA.
• Self-employed: Up to 20% of gross income.
• Investment Options: Active Choice (allocate up to 75% in equity, 50% for government employees/senior citizens) or Auto Choice (age-based allocation).

Withdrawal Rules:

• At Retirement (Age 60/Superannuation): Minimum 40% of corpus to purchase an annuity for lifelong pension; up to 60% as tax-free lump sum. If corpus ≤ ₹5 lakh, full withdrawal allowed (40% taxable).
• Partial Withdrawal: Up to 25% of self-contributions after 3 years for specific purposes (e.g., illness, education), tax-exempt.
• On Death: Entire corpus paid to nominee.

Tax Benefits (Tier I):

• Employee contribution: Up to 10% of salary (20% for self-employed) under Section 80CCD(1), within ₹1.5 lakh limit (Section 80CCE).
• Additional deduction: ₹50,000 under Section 80CCD(1B).
• Employer contribution: Up to 10% (14% for central government) under Section 80CCD(2), above ₹1.5 lakh limit, up to ₹7.5 lakh aggregate.
• Lump sum: 60% tax-exempt (Section 10(12A)); annuity purchase exempt (Section 80CCD(5)).
• Partial withdrawal: Tax-exempt up to 25% (Section 10(12B)).

Tier II: No tax benefits unless locked in for 3 years (central government employees, Section 80C up to ₹1.5 lakh).

Unified Pension Scheme (UPS) Option: Central government employees under NPS (joined after January 1, 2004) can opt for UPS by September 30, 2025, for a guaranteed pension (50% of basic pay for 25+ years, minimum ₹10,000). The choice is irrevocable.

Returns: Market-linked, with historical annualized returns of 10–20% depending on asset allocation. No fixed interest rate.

For more details, visit PFRDA or Protean CRA and the UPS Pension Scheme website: UPS Pension Scheme.

Contact us

For any query contact our UPS Calculator website's official email - Help@UpsCalculator.in