CalculatorsNPS Calculator
Calculate & compare your National Pension System (NPS) investment corpus against various investment options, considering tax implications.
An NPS calculator is a tool that helps you calculate the returns on your NPS investments while considering tax implications.
The best feature of this tool is that it also allows you to compare your NPS investments with various other options, such as equity and debt.
Using this NPS calculator, you can not only calculate returns on your NPS investments but also compare them with other retirement instruments, enabling smarter financial decisions.
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All you need to know about NPS Calculator
TABLE OF CONTENT
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What is an NPS Calculator?
The NPS Calculator is an advanced tool designed to help you calculate the potential returns from your National Pension System (NPS) investments. By factoring in contributions, investment tenure, and tax benefits, the calculator provides a clear picture of your retirement corpus with projected returns. Additionally, it lets you compare your NPS corpus with projected returns against other investment options like equity, PPF and debt.
How to Calculate Returns Using the NPS Calculator
Using our NPS Calculator is a simple. Follow these steps to estimate your returns and plan your retirement effectively:
Input Your Investment Period
- Enter your current age.
- Enter how many years you will invest by entering the number of years until your desired retirement age.
- For example, if your current age is 30 and your desired retirement age is 60, then you can input 30.
Provide Your NPS Investment Details
- Choose whether you want to calculate based on monthly or yearly contributions.
- Enter the amount you plan to invest in the NPS.
- Example: ₹5,000 per month or ₹60,000 annually.
- Adjust the expected rate of return on investment using the slider, which ranges from 5% to 15%.
- Note: The slider highlights historical return ranges (8% to 13%) based on NPS investments in equity and debt allocations.
Add Other Investment Details for Comparison
- Select your current tax slab to calculate tax savings accurately.
- Choose an alternative investment for comparison:
- Options include Equity Funds, Debt Funds, PPF, or Others.
- Adjust the expected return rate for your alternative investment using the slider.
- Example: If you expect an 11% return, set the slider accordingly.
- Note: This tool helps you understand how NPS stacks up against other investments.
Review Your Results
- Once all details are entered, click on the "Calculate" button.
- View a detailed breakdown of the Investment Corpus Value at retirement age:
- The results will compare your NPS corpus with the chosen alternative investment.
- Additional sections allow you to explore:
- How your NPS corpus is divided at retirement: 60% as a tax-free lump sum and 40% used to purchase an annuity, along with the estimated monthly pension amount.
- A comparison of alternative investment options, including their expected returns and tax implications.
Download Your Results
After reviewing, you can download the results for future reference or share them with your financial advisor.
Why Use the NPS Calculator?
Accurate Projections
Get reliable estimates for your NPS returns tailored to your inputs.
Tax Savings Insights
Discover how much you can save under Sections 80C and 80CCD(1B).
Compare NPS Investment Corpus
Evaluate NPS performance against mutual funds, PPF, and fixed deposits.
Simple and Fast
Enjoy an easy-to-use interface with instant results.
Smarter Financial Planning
Make informed decisions for a secure and stress-free retirement.
Benefits of Planning with the NPS Calculator
Using the NPS Calculator offers several advantages that simplify retirement planning and enhance your financial strategy:
Make Data-Driven Decisions
- Compare NPS returns with other retirement investment options like equity funds, PPF, debt funds, or fixed deposits.
- Evaluate which investment strategy aligns best with your goals.
Visualise Your Retirement Corpus
- See how much you can accumulate by the time you retire, based on your contributions and investment tenure.
- Gain a clear understanding of your future financial security at a glance.
Optimise Tax Savings
- Plan your investments to maximise tax efficiency and reduce taxable income.
Plan Early for Bigger Returns
- Discover the impact of starting early on your retirement savings and how it leads to a significantly larger corpus.
- Use the calculator to adjust contributions and investment periods for optimal results.
Simplify Retirement Planning
- Understand the mandatory annuity allocation, tax-free withdrawals, and how to balance your investments for a secure post-retirement life.
- Evaluate scenarios to ensure you make the best financial choices.
Quick and Convenient
- Save time with instant results and insights, enabling you to plan effectively without complex calculations.
- Example: Comparison of NPS Corpus vs. Equity Investments.
Example: How the NPS Calculator Works
Investor Profile
- Starting Age: 30 years
- Investment Duration: 30 years (till age 60)
- Monthly Investment Amount: ₹5,000
- Annual Investment Amount: ₹60,000
- Expected Return on Investment: 11% per annum (for both NPS and Equity Funds)
- Tax Slab: 20%
Details of NPS investment
| Parameter | NPS Investment |
|---|---|
| NPS Investment Corpus at Age 60 | ₹1,41,51,139 |
| Maximum Corpus Withdrawal at the Age 60 (up to 60%) | ₹84,90,684 |
| Remaining Corpus Invested for Pension (40%) | ₹56,60,456 |
| Pension Amount Per Annum (@ 6.5%)* | ₹3,67,930 |
*Tax on investments is computed based on the income tax slab rate you fall into.
Details on Equity Funds investment
| Parameter | NPS Investment |
|---|---|
| Investment Per Month (Post Tax Deduction of 20% on ₹5,000)* | ₹4000 |
| Corpus accumulated Estimated Applicable Taxes** | ₹1,13,20,911 |
| Estimated Applicable Taxes** | (-) ₹12,19,489 |
| Net Corpus After Taxes | (-) ₹1,01,01,422 |
**12.5% tax applicable to profits exceeding ₹1.25 lakh on long term capital gains on equity funds.
*Tax on investments is computed based on the income tax slab rate you fall into.
Results
- By investing ₹5,000 monthly, the investor can accumulate over ₹1.42 Crore for retirement, with significant tax savings and a steady post-retirement income.
Frequently Asked Questions
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Disclaimer
This NPS calculator is provided for informational purposes and to facilitate calculations. It is not meant to serve as tax advice. Please be aware that the results of this calculator may not reflect actual returns and are provided for illustrative purposes only. For specific tax-related questions, please consult with your advisor.