# NPS Calculator and 80CCD Limits | Aalekh > Project your NPS corpus, the annuity you must buy, and what 80CCD(1B) and 80CCD(2) still allow under each tax regime in FY 2026-27. Canonical URL: https://www.aalekh.ai/calculators/nps [All calculators](/calculators) For individualsRates reviewed September 2026 # NPS Calculator: Corpus, Annuity and 80CCD Deductions An NPS calculator projects the corpus your monthly contributions will build by the time you exit, then splits it between the lump sum you can withdraw and the annuity you are required to buy. The corpus is entirely market linked, so the return you assume is an input rather than a promise. The deduction position changed materially with the arrival of the new tax regime as the default. Self-funded contributions under 80CCD(1) and the additional ₹50,000 under 80CCD(1B), now Section 124(3) of the Income-tax Act, 2025, are available only on the old regime. The employer contribution under 80CCD(2) is the exception: it survives on the new regime at 14% of salary for all employees, including private sector employees, which makes it the most valuable salary structuring lever left to a new regime taxpayer. The exit rules were loosened in December 2025. Under the PFRDA amendment regulations, a non-government subscriber with a corpus above ₹12 lakh may take up to 80% as a lump sum and annuitise only 20%, against the earlier 60:40 split. The tax law has not followed, so the exemption remains capped at 60% of the corpus and the extra slice is taxable. ## NPS Calculator Current age years Age at exit Normally 60, though you may stay invested longer. years Monthly contribution to Tier I ₹ Expected annual return Market linked and not guaranteed. Run a conservative case alongside it. % Expected annuity rate The rate the annuity provider offers at exit. Your own assumption, not a statutory figure. % Corpus at exit ₹1,32,68,334 ₹1.33 crore from ₹30,00,000 contributed over 25 years Contribution period300 monthly contributions 25 years Total contributed ₹30,00,000 Corpus at exit₹1.33 crore at 10% a year, compounded monthly ₹1,32,68,334 Growth on contributions77.39% of the corpus ₹1,02,68,334 Compulsory annuityAt least 20% for a non-government subscriber above ₹12 lakh ₹26,53,667 Lump sum withdrawnUp to 80% of the corpus ₹1,06,14,667 Estimated monthly pension₹26,53,667 annuitised at 6% ₹13,268 Exempt part of the lump sumExemption stops at 60% of the corpus, ₹79,61,000 ₹79,61,000 Taxable part of the lump sum ₹26,53,667 - Withdrawal is exempt up to 60% of the corpus. PFRDA now allows a non-government subscriber above ₹12 lakh to take 80% as a lump sum, but the tax law was not raised to match, so the slice between 60% and 80% is taxed at slab rates. - Exit bands for a non-government subscriber: up to ₹8 lakh can be withdrawn in full, ₹8 lakh to ₹12 lakh allows a lump sum of up to ₹6 lakh, and above ₹12 lakh at least 20% must buy an annuity. Government subscribers stay on the 60:40 split. - The annuity purchase itself is not taxed. The pension it pays is taxed each year as income. - Under the new regime only the employer contribution under 80CCD(2) survives, at 14% of salary for all employees. Your own 80CCD(1) and the additional ₹50,000 under 80CCD(1B), now Section 124(3) of the Income-tax Act, 2025, need the old regime. - A level monthly contribution understates most real outcomes, since contributions usually rise with salary. Treat this as a floor rather than a forecast. ## The formula Corpus = Monthly contribution x \[((1 + r) ^ n - 1) / r\], where r is the monthly return and n the number of contributions r Expected annual return divided by 12. NPS returns are market linked and vary with your equity, corporate debt and government securities mix. n Number of monthly contributions between joining and exit, normally up to age 60 though you may stay invested longer. Annuity portion The part of the corpus that must buy an annuity: at least 20% for a non-government subscriber with a corpus above ₹12 lakh, and 40% for a government subscriber. Exempt lump sum Withdrawal is exempt up to 60% of the corpus under the provision carried forward from Section 10(12A) of the 1961 Act. A level monthly contribution understates most real outcomes, since contributions usually rise with salary; treat the projection as a floor rather than a forecast. ## How to calculate it 1. 1 ### Choose the right account Tier I is the retirement account: it is locked in, it carries the tax deductions, and it is the one this calculation applies to. Tier II is a voluntary open-ended account with no lock-in and no deduction for private sector subscribers. 2. 2 ### Set the contribution and horizon Enter the monthly amount and the years to age 60. Because the corpus compounds, the early years carry disproportionate weight, and a five-year delay in starting costs far more than a modest shortfall in the monthly figure. 3. 3 ### Assume a return honestly Pick a rate consistent with your asset allocation rather than the best year on record, and run a lower case alongside it. Nothing in NPS guarantees a return. 4. 4 ### Split the corpus at exit Apply the annuity minimum to find the compulsory annuity, and treat the balance as the lump sum. A larger lump sum raises the taxable slice, because the exemption stops at 60% of the corpus. 5. 5 ### Claim the right deductions each year On the old regime, claim 80CCD(1) within the ₹1,50,000 ceiling and 80CCD(1B) for up to ₹50,000 more. On the new regime, only the employer contribution under 80CCD(2) is deductible, so ask payroll to route part of your CTC through it. ## NPS deduction limits for FY 2026-27 NPS deduction limits for FY 2026-27 Deduction Limit Old regime New regime 80CCD(1), own contribution Within the ₹1,50,000 Section 80C ceiling Available Not available 80CCD(1B), additional contribution ₹50,000, over and above the ₹1,50,000 ceiling Available Not available 80CCD(2), employer contribution 14% of salary on the new regime; 10% for non-government employers on the old regime Available Available NPS Vatsalya, minor children Within the same ₹50,000 ceiling, for up to two minor children Available Not available ## Worked example Monthly contribution to Tier I ₹10,000 Years to age 60 25 years Assumed annual return 10% Subscriber type Non-government - Total contributed = ₹10,000 x 300 months = ₹30,00,000 - Corpus at 10% a year compounded monthly = about ₹1,32,68,000 - Minimum annuity at 20% of corpus = about ₹26,53,600 - Lump sum at the maximum 80% = about ₹1,06,14,400 - Exemption is capped at 60% of the corpus = about ₹79,60,800 Corpus about ₹1.33 crore. Roughly ₹79,60,800 of the lump sum is exempt and the remaining ₹26,53,600 of the lump sum is taxable at slab rates. ## Frequently asked questions Is the NPS deduction available under the new tax regime? Only the employer contribution under 80CCD(2), capped at 14% of salary for all employees including those in the private sector. Your own contributions under 80CCD(1) and the additional ₹50,000 under 80CCD(1B) are personal investment deductions and the new regime withdrew that whole category. Since the new regime is the default, most salaried taxpayers now benefit from NPS only through payroll. How much of the NPS corpus is tax free on exit? Up to 60% of the accumulated corpus is exempt, carried forward from Section 10(12A) of the 1961 Act. PFRDA now permits a non-government subscriber to take up to 80% as a lump sum, but the income-tax exemption was not raised to match, so the slice between 60% and 80% is taxable at slab rates. The annuity itself is not taxed at purchase; the pension it pays is taxed each year as income. What is the difference between NPS Tier I and Tier II? Tier I is the retirement account. It is locked in until 60 apart from limited partial withdrawals, and it is the only one that attracts the 80CCD deductions. Tier II is a voluntary savings account with no lock-in and no exit load, and it carries no deduction for private sector subscribers, which makes it closer to an open-ended mutual fund than to a pension product. How much annuity must I buy at 60? A non-government subscriber with a corpus above ₹12 lakh must annuitise at least 20%, reduced from 40% by the PFRDA amendment regulations notified in December 2025. Below that there are two easier bands: a corpus up to ₹8 lakh can be withdrawn in full, and a corpus between ₹8 lakh and ₹12 lakh allows a lump sum of up to ₹6 lakh with the balance going to an annuity or systematic withdrawal. Government subscribers continue under the 60:40 structure. What is the 80CCD(1B) deduction of ₹50,000? It is an additional deduction for your own Tier I contributions, over and above the ₹1,50,000 ceiling that 80CCD(1) shares with Section 80C. Under the Income-tax Act, 2025 it is Section 124(3). It is available only on the old regime, so a taxpayer on the default new regime cannot claim it. Can I claim a deduction for NPS Vatsalya contributions for my child? Yes, on the old regime. Contributions to an NPS Vatsalya account opened for a minor child qualify under 80CCD(1B) for up to two minor children, but within the same ₹50,000 ceiling rather than in addition to it. If you already exhaust that ceiling with your own contributions, the child contributions add no further deduction. What return should I assume in an NPS calculation? There is no assured return, since the corpus tracks the equity, corporate debt and government securities funds you have chosen. Use a rate consistent with your allocation and run a conservative case alongside it. An aggressive assumption over 25 or 30 years compounds into a projection that bears little relation to the likely outcome. ## Sources Rates and rules on this page come from the following. This is a working aid, not professional advice: confirm anything material with your Chartered Accountant before you act on it. - [PFRDA: exits and withdrawals under NPS for the All Citizen Model](https://pfrda.org.in/documents/33652/676426/Exits+and+Withdrawals+under+NPS+for+All+Citizen+Model.pdf) - [Income Tax Department: objective and scope of the Income-tax Act, 2025](https://www.incometax.gov.in/iec/foportal/help/all-topics/e-filing-services/objective-and-scope-new-act) ## Stop re-keying these figures Aalekh runs this calculation on your actual client data, pulls the underlying ledgers straight from Tally, and carries the result through to the financial statements and the return. 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