Plan retirement with Tax Benefits | 80CCD(1B)
✓ Extra ₹50K Deduction - 80CCD(1B) over and above 80C limit
✓ Market-Linked Returns - Choose equity/debt allocation
✓ Low Cost - Only 0.25% fund management charges
✓ Portable - Single account across all jobs
✓ Lock-in till 60 years | ✓ Tax benefits 80C + 80CCD(1B) | ✓ Min ₹6,000/year
Yearly: ₹60,000
Investment Period: 30 Years
⚠️ Minimum 40% mandatory for annuity
60% of corpus withdrawn tax-free
40% invested for monthly pension
Lifelong monthly income (taxable)
Yearly: ₹2.74 L
Up to ₹1.5L
Total over 30 years
| Year | Age | Invested | Returns | Total Corpus |
|---|---|---|---|---|
| Y1 | 31 | ₹60,000 | ₹3,351 | ₹63,351 |
| Y2 | 32 | ₹1.20 L | ₹13,337 | ₹1.33 L |
| Y3 | 33 | ₹1.80 L | ₹30,650 | ₹2.11 L |
| Y4 | 34 | ₹2.40 L | ₹56,059 | ₹2.96 L |
| Y5 | 35 | ₹3.00 L | ₹90,412 | ₹3.90 L |
| Y6 | 36 | ₹3.60 L | ₹1.35 L | ₹4.95 L |
| Y7 | 37 | ₹4.20 L | ₹1.90 L | ₹6.10 L |
| Y8 | 38 | ₹4.80 L | ₹2.57 L | ₹7.37 L |
| Y9 | 39 | ₹5.40 L | ₹3.38 L | ₹8.78 L |
| Y10 | 40 | ₹6.00 L | ₹4.33 L | ₹10.33 L |
| Y11 | 41 | ₹6.60 L | ₹5.44 L | ₹12.04 L |
| Y12 | 42 | ₹7.20 L | ₹6.74 L | ₹13.94 L |
| Y13 | 43 | ₹7.80 L | ₹8.23 L | ₹16.03 L |
| Y14 | 44 | ₹8.40 L | ₹9.94 L | ₹18.34 L |
| Y15 | 45 | ₹9.00 L | ₹11.90 L | ₹20.90 L |
| Y16 | 46 | ₹9.60 L | ₹14.12 L | ₹23.72 L |
| Y17 | 47 | ₹10.20 L | ₹16.63 L | ₹26.83 L |
| Y18 | 48 | ₹10.80 L | ₹19.48 L | ₹30.28 L |
| Y19 | 49 | ₹11.40 L | ₹22.68 L | ₹34.08 L |
| Y20 | 50 | ₹12.00 L | ₹26.28 L | ₹38.28 L |
| Y21 | 51 | ₹12.60 L | ₹30.33 L | ₹42.93 L |
| Y22 | 52 | ₹13.20 L | ₹34.86 L | ₹48.06 L |
| Y23 | 53 | ₹13.80 L | ₹39.92 L | ₹53.72 L |
| Y24 | 54 | ₹14.40 L | ₹45.58 L | ₹59.98 L |
| Y25 | 55 | ₹15.00 L | ₹51.89 L | ₹66.89 L |
| Y26 | 56 | ₹15.60 L | ₹58.93 L | ₹74.53 L |
| Y27 | 57 | ₹16.20 L | ₹66.77 L | ₹82.97 L |
| Y28 | 58 | ₹16.80 L | ₹75.49 L | ₹92.29 L |
| Y29 | 59 | ₹17.40 L | ₹85.19 L | ₹1.03 Cr |
| Y30 | 60 | ₹18.00 L | ₹95.97 L | ₹1.14 Cr |
National Pension Scheme (NPS) is a government-backed voluntary retirement savings program offering market-linked returns with professional fund management. It provides the best tax benefits with an extra ₹50,000 deduction under 80CCD(1B) over and above the 80C limit.
Our calculator helps you plan retirement with Tier 1 & Tier 2 options, calculate monthly pension through annuity, compare with PPF/EPF, and visualize year-wise corpus growth with complete tax savings breakdown.
Section 80C: Up to ₹1.5L deduction
Section 80CCD(1B): Extra ₹50K exclusively for NPS
Total: Save up to ₹62,400/year at 30% tax slab
Choose allocation: Equity, Corporate Bonds, Government Securities
Historical returns: 9-12% annually (10-year average)
Auto rebalancing: Equity reduces as you approach retirement
Fund management: Only 0.25% (lowest in industry)
No entry/exit: Zero charges on contributions
Track online: 24/7 monitoring via CRA portal
60% lump sum: Tax-free withdrawal at retirement
40% annuity: Lifelong monthly pension
Flexible: Can choose 40-100% for annuity
Single account: Continues across all jobs
Switch funds: Change allocation anytime
Partial withdrawal: After 3 years for specific needs
PFRDA regulated: Pension Fund Regulatory Authority
Safe custody: NSDL manages accounts
Trusted: 7+ crore subscribers nationwide
| Feature | Tier 1 (Retirement) | Tier 2 (Voluntary) |
|---|---|---|
| Purpose | Retirement planning | Flexible savings |
| Lock-in Period | Till 60 years | No lock-in |
| Tax Benefits 80C | Yes (₹1.5L) | No |
| 80CCD(1B) Benefit | Yes (Extra ₹50K) | No |
| Minimum Investment | ₹500/year | ₹1,000/year |
| Maximum Investment | No limit | No limit |
| Withdrawal | Partial after 3 years | Anytime |
| Annuity Purchase | Mandatory 40% | Not required |
| Eligibility | 18-70 years | Only if Tier 1 exists |
| Best For | Retirement + Tax savings | Emergency savings |
Annuity is a financial product that provides regular monthly pension from your NPS corpus. At retirement, you purchase annuity from PFRDA-approved life insurance companies. The annuity provider pays you monthly pension for life in exchange for the lump sum invested.
Pension till your death. Highest monthly amount but no return to family.
Continues to spouse after your death. Lower pension than single life.
Capital returned to nominee after death. Lowest monthly pension.
Pension increases 3% annually. Starts low but beats inflation.
Equity (E): 75%
Corporate Bonds (C): 15%
Govt Securities (G): 10%
Expected: 11-13% returns
Rationale: Long time to recover from volatility, maximize growth
Equity (E): 50%
Corporate Bonds (C): 30%
Govt Securities (G): 20%
Expected: 9-11% returns
Rationale: Balance growth with stability, reduce risk gradually
Equity (E): 25%
Corporate Bonds (C): 40%
Govt Securities (G): 35%
Expected: 8-9% returns
Rationale: Preserve capital, ensure stable corpus near retirement
💡 Pro Tip: NPS offers Auto Choice - automatically adjusts equity allocation as you age. Starts aggressive at young age, gradually shifts to conservative near retirement.
National Pension Scheme (NPS) is a government-backed voluntary retirement savings scheme launched in 2004. It allows you to invest regularly during your working years and build a retirement corpus. At retirement (60 years), you must invest minimum 40% in annuity (for monthly pension) and can withdraw remaining 60% as lump sum tax-free. NPS offers market-linked returns through equity, corporate bonds, and government securities with professional fund management at just 0.25% charges.
NPS offers best tax benefits among all retirement plans: (1) Section 80C: Up to ₹1.5 lakh deduction (shared with PPF, EPF, ELSS, etc.), (2) Section 80CCD(1B): Extra ₹50,000 deduction exclusively for NPS over and above 80C limit, (3) Total: Save up to ₹2 lakh annually, (4) At 30% tax slab: Save ₹62,400/year. Additionally, 60% lump sum withdrawal at retirement is tax-free. NPS is the ONLY investment offering this extra ₹50K deduction benefit.
Tier 1 (Mandatory retirement account): Lock-in till 60 years, tax benefits under 80C & 80CCD(1B), minimum ₹500/year contribution, 40% must buy annuity at retirement, cannot withdraw before 60 (except partial withdrawal after 3 years for specific purposes). Tier 2 (Voluntary savings): No lock-in, withdraw anytime, NO tax benefits, minimum ₹1000/year, purely investment account, can be opened only if Tier 1 exists. Use Tier 1 for retirement + tax savings, Tier 2 for flexible savings.
At retirement, minimum 40% of corpus must be invested in annuity plan from approved insurance companies. Monthly pension = (Annuity Amount × Annuity Rate) / 12. Example: If corpus is ₹1 crore and you invest 40% (₹40 lakh) in annuity at 6% return: Monthly pension = (40,00,000 × 0.06) / 12 = ₹20,000/month. Higher annuity percentage = higher monthly pension but lower lump sum. Annuity rates vary (5-8%) based on plan type, age, and market conditions. Pension is taxable as per your income tax slab.
Partial withdrawal: Allowed after 3 years of account opening. Maximum 25% of your contribution (not corpus) can be withdrawn. Permitted only for specific purposes: children higher education, children marriage, purchase/construction of house, treatment of critical illness. Only 3 withdrawals allowed during entire NPS tenure. Premature exit: If you exit before 60 years (after 10 years), mandatory 80% must go to annuity, only 20% lump sum. Before 10 years, not recommended as full amount goes to annuity.
Best combination approach: (1) EPF: If employed, mandatory 12% contribution. 8.25% return, tax-free (EEE), no choice - take it! (2) NPS: Extra ₹50K tax benefit, market-linked returns (9-12% historically), flexible equity allocation, lowest cost (0.25%). Best for maximizing retirement corpus. (3) PPF: 7.1% guaranteed tax-free returns, good for stable portion. Ideal strategy: EPF (mandatory) + NPS (for tax benefits + higher returns) + PPF (for safety). Allocate based on risk appetite: Conservative 70% PPF/EPF + 30% NPS, Moderate 50-50, Aggressive 70% NPS + 30% PPF/EPF.