NPS calculator

Private-sector subscribers must put at least 20% into an annuity

When you leave NPS normally (individual accounts at 60 or after 15 years, corporate and government accounts on retirement), PFRDA's exit regulations as amended on 16 December 2025 set the minimum share that must buy an annuity, a pension paid by an insurer for life:

• Private-sector employees and individuals: at least 20% to an annuity, up to 80% as a lump sum or in instalments.
• Government employees: at least 40% to an annuity, up to 60% as a lump sum.
• Smaller balances: with ₹8 lakh or less you can take the whole amount. Between ₹8 lakh and ₹12 lakh you can take up to ₹6 lakh as a lump sum and the rest in instalments over at least six years, or as an annuity.
• Leaving early: private-sector subscribers who leave before meeting these conditions must put at least 80% into an annuity, unless the balance is ₹5 lakh or less.

Sources: PFRDA (Exits and Withdrawals under the NPS) Regulations, 2015, as amended on 16 December 2025, regulations 3 and 4 and Schedule I; PFRDA press release of 19 December 2025.

Up to 60% of the payout is tax-free

A payment from the NPS Trust when you close your account or opt out is exempt up to 60% of the total amount payable (Schedule II, serial 6). The money used to buy an annuity is not treated as received in that year, but the pension the annuity pays is taxed as income when you receive it (section 124(6) and (9)). Non-government subscribers can now take up to 80% as a lump sum; the part above 60% is not covered by the exemption, so ask a chartered accountant how it will be taxed for you.

Employer NPS is deductible in both regimes; your own NPS only in the old one

Your employer's NPS contribution is part of your salary (Income-tax Act 2025, section 16(k)) and is then deducted up to the limit. In the new regime the only Chapter VIII deductions allowed are those in sections 124(1) and 124(2), 125(2) and 146, so your own NPS saves tax only in the old regime (section 202(2)(a); section 124; Schedule XV, paragraph 1(y)). Our salary calculators use the 10% limit in the old regime, as for private-sector employers.

On a 15 LPA CTC, ₹75,000 of employer NPS cuts tax by ₹52,940 a year

With the same 15 LPA CTC, moving 10% of basic, ₹75,000 a year, into employer NPS takes new-regime income tax from ₹77,830 to ₹24,890. Your monthly in-hand salary falls from ₹1,00,299.58 to ₹98,461.25, because ₹6,250 a month now goes into your NPS account instead of your bank.

In the old regime, putting ₹50,000 of your own money into NPS under section 124(3) takes the tax on the same CTC, with no other deductions, from ₹1,89,210 to ₹1,73,610. Try your own figures with the employer NPS and old-regime fields in the salary breakup calculator or the income tax calculator.

Engine figures: Maharashtra, basic 50% of CTC, PF on full basic, rules checked 21 October 2026.

NPS, in short

Are NPS returns guaranteed?

No. NPS Trust says NPS does not offer fixed returns and its returns are market-linked, so the figures on this page are an illustration at a return you choose.

How much of my NPS must buy an annuity?

At normal exit, at least 20% for private-sector and individual subscribers and at least 40% for government employees, under PFRDA's exit regulations as amended on 16 December 2025. Smaller balances have other options.

Is the NPS lump sum tax-free?

Up to 60% of the amount paid when you close your account is exempt under Schedule II of the Income-tax Act 2025. A lump sum above 60% is not covered by that exemption, and annuity income is taxed when you receive it.