NPS Investment Calculator

Understanding the National Pension System (NPS)

The National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme designed to enable a systematic saving habit for your old age. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

How Does NPS Work?

Under NPS, your contributions are invested in a mix of assets like equities, corporate bonds, and government securities. The final pension wealth depends on the contributions made and the income generated from these investments. This calculator helps you understand the monthly contribution amount based on your salary.

Key Features of NPS

• Contribution: For government employees, a contribution of 10% of the basic salary plus dearness allowance (DA) is made by the employee, and a corresponding 14% is contributed by the government.
• Tax Benefits: NPS offers attractive tax benefits under Section 80C, 80CCD(1B), and 80CCD(2) of the Income Tax Act.
• Portability: Your NPS account (PRAN) is unique and portable across jobs and locations.
• Withdrawal: At retirement (age 60), you can withdraw up to 60% of the corpus as a lump sum (tax-free), and the remaining 40% must be used to purchase an annuity plan to provide a monthly pension.

How This Calculator Helps

This tool simplifies the calculation of your monthly NPS contributions. By entering your basic salary and the current DA percentage, you can instantly see:

• Your mandatory monthly contribution.
• The contribution made by your employer.
• The total amount invested in your NPS account each month.

This helps in better financial planning and understanding how your retirement corpus is being built over time.