NPS Calculator India 2025-26

NPS Calculator India 2025-26 — Corpus, Pension & Tax Benefits

The National Pension System (NPS) combines market-linked growth with a guaranteed lifelong pension. Its standout advantage: an additional ₹50,000 deduction under 80CCD(1B) that sits entirely outside the ₹1.5L 80C limit — making it the most tax-efficient retirement tool for Old Regime taxpayers.

The Big Tax Advantage — 80CCD(1B)

Most people know 80C gives ₹1.5L deduction (PPF, ELSS, LIC etc.). NPS gives you an additional ₹50,000 under 80CCD(1B) — completely separate from 80C. For a 30% slab taxpayer, this saves ₹15,000 in tax every year. Over 25 years, that’s ₹3.75 lakhs of tax you don’t pay — plus the compounding on those savings.

NPS at Retirement — How It Works

At 60, you can withdraw up to 60% of your corpus tax-free as lump sum. The remaining minimum 40% must be used to buy an annuity from a PFRDA-approved insurer — this gives you a monthly pension for life. The annuity income is taxable as salary in the year received.

NPS vs PPF — Key Differences

• NPS: Market-linked returns (10–12% historical for equity), but only 60% tax-free at maturity
• PPF: Guaranteed 7.1%, 100% tax-free maturity (EEE) — lower returns but zero risk
• NPS unique edge: Additional ₹50K deduction under 80CCD(1B) — PPF cannot offer this
• Lock-in: NPS locks till 60 (partial withdrawal allowed after 3 yrs for specific reasons)
• Best strategy: Max PPF for the guaranteed base + ₹50,000 to NPS for the extra 80CCD(1B) deduction