Lower fees than mutual funds, an extra ₹50,000 tax break under Sec 80CCD(1B), but 40% of the corpus has to be annuitised at 60. The trade-off is built in.
Equity tilt is the single biggest lever. The 75% cap on Active Choice exists because variance compounds.
| Equity % ↓ / Years → | 15Y | 20Y | 25Y | 30Y | 35Y |
|---|---|---|---|---|---|
| 25% | ₹52.76 L | ₹1.01 cr | ₹1.80 cr | ₹3.09 cr | ₹5.17 cr |
| 50% | ₹57.62 L | ₹1.13 cr | ₹2.09 cr | ₹3.71 cr | ₹6.41 cr |
| 60% | ₹59.70 L | ₹1.19 cr | ₹2.22 cr | ₹3.99 cr | ₹7.01 cr |
| 75% | ₹62.99 L | ₹1.28 cr | ₹2.43 cr | ₹4.47 cr | ₹8.02 cr |
| 100% | ₹68.92 L | ₹1.44 cr | ₹2.85 cr | ₹5.42 cr | ₹10.11 cr |
60% lumpsum, 40% annuity at age 60. The 60% lumpsum is tax-free under Sec 10(12A). The 40% has to buy an annuity from an empanelled life insurer; the annuity income is then fully taxable as "Other Income" year by year. Annuity yields today are 6-7% — meaningfully lower than equity long-run.
Tax deduction stack: Sec 80CCD(1) — employee contribution up to 10% of basic+DA, within the ₹1.5 L 80C ceiling. Sec 80CCD(1B) — additional ₹50,000 over and above 80C. Sec 80CCD(2) — employer contribution up to 14% of basic+DA (govt) / 10% (private), no upper cap and outside the ₹1.5 L 80C cap. NPS's biggest edge is 80CCD(2) for salaried.
Equity cap: Under Active Choice, equity max 75% till age 50, then tapers 2.5pp/year to a 50% cap at age 60. Auto Choice slopes equity down faster. This calculator assumes you hold a constant allocation — adjust manually if you'll glide-path.
Returns assumed: Equity sleeve 12% long-run (Nifty 500 TRI 25Y geometric), Debt + Gilt sleeve 7.5% blended. These are point estimates; actual NPS PFM 10Y CAGR varies 9-12% for E, 7-8.5% for C, 7-7.5% for G.
What this does not model: systematic withdrawal plan (SLW) introduced 2024, partial withdrawal rules (3 max in lifetime, only after 3 years, capped 25%), exit before 60 (must annuitise 80%), CPS for government employees, Tier II (no tax breaks, no lock-in).
Further reading: NPS vs PPF · ELSS vs NPS.
Sources: PFRDA NPS Schemes Master Circular, Income Tax Act Sec 80CCD, Sec 10(12A), latest PFM disclosure docs (HDFC, ICICI, SBI Pension Funds).
Calculators on this site use the inputs you provide and the assumptions disclosed in their methodology. Returns are not promised or guaranteed. MintByte is an AMFI-registered mutual fund distributor (ARN-314872). MintByte does not issue buy/sell recommendations on specific securities — the site is an educational data and analytics platform. Not investment advice. Methodology · How we earn.