NPS Pension Calculator

The National Pension System (NPS) replaced the Old Pension Scheme (OPS) for all Central Government employees who joined service on or after 1 January 2004. Under NPS, your retirement benefit depends on how much you accumulate in your PRAN (Permanent Retirement Account Number) account over your career — not on a fixed formula like OPS. The monthly contribution is 10% of (Basic Pay + DA) from the employee, matched by 14% from the Government, making the total monthly injection 24% of (Basic + DA) into your account.

NPS vs OPS — Key Differences for Government Employees

Under OPS, a retiring employee was guaranteed 50% of the last drawn basic pay as monthly pension — for life — along with Dearness Relief revisions. NPS offers no such guarantee. Your corpus at retirement is split: 60% can be withdrawn as a tax-free lump sum, and the mandatory 40% must purchase an annuity from a licensed provider. The monthly pension depends on the annuity rate at that time (currently 5–7% p.a. from providers like LIC, SBI Life, HDFC Life). Use our NPS corpus calculator to see exactly how much pension you can expect at different retirement ages and return scenarios.

NPS Tier I vs Tier II — What's the Difference?

Tier I is the mandatory pension account with lock-in until retirement (age 60). Withdrawals before 60 are restricted to partial withdrawals for specific reasons (illness, education, home purchase). Tier II is a voluntary savings account with no lock-in — you can withdraw at any time. Tier II has no tax benefit for Central Government employees under the New Tax Regime. The government contribution (14%) goes only to Tier I.

Tax Benefits on NPS Contributions

The government's 14% NPS contribution is deductible under Section 80CCD(2) — and this deduction is available in both Old and New Tax Regimes, with no cap other than the actual employer contribution. This is one of the most powerful deductions for Central Government employees. Use the income tax calculator to see exactly how much tax you save by claiming the 80CCD(2) deduction on your 7th CPC salary.

How NPS Corpus Grows Over Your Service Years

NPS returns are market-linked. The default scheme for Central Government employees (Scheme G/C/E auto-choice) has delivered historical 10-year returns of 9–11% p.a. For a Level 6 employee joining at age 28 and retiring at 60 with an average basic of ₹60,000 growing at ~3% per year, the projected NPS corpus is ₹1.5–2 crore — yielding a monthly pension of ₹50,000–65,000 at 6% annuity. Check your pay level progression to track your basic pay growth over service years.