NPS Calculator
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About National Pension System (NPS)
The National Pension System (NPS) is a government-sponsored retirement savings scheme that helps you accumulate funds for your retirement. It offers market-linked returns with tax benefits under Section 80C and 80CCD.
Key Features
• Voluntary contribution-based pension system
• Two account types: Tier I (mandatory, with lock-in) and Tier II (voluntary, flexible)
• Partial withdrawal allowed after 3 years (up to 25% of contributions)
• Must purchase annuity with minimum 40% of corpus at retirement
Tax Benefits
• Tier I contributions eligible for deduction under Section 80CCD(1) up to ₹1.5 lakh
• Additional ₹50,000 deduction under Section 80CCD(1B)
• Employer contributions up to 10% of salary (Basic+DA) deductible under Section 80CCD(2)
• Maturity amount partially tax-free (60% tax-exempt, 40% taxable as annuity)
Withdrawal Rules
• Early exit allowed after 10 years (80% must be used to buy annuity)
• Normal exit at 60: 60% lump sum (tax-free), 40% annuity purchase mandatory
• Premature exit: 20% lump sum, 80% annuity purchase
• Partial withdrawal (up to 25%) allowed after 3 years for specific purposes