Calculate your National Pension System maturity corpus, monthly pension, and tax savings under Section 80CCD(1B).
Open NPS Tier 1 account in minutes via Groww, Zerodha or NSDL. Get ₹50,000 extra tax deduction under 80CCD(1B).
NPS (National Pension System) is a government-regulated retirement savings scheme managed by PFRDA. It invests in a mix of equity, corporate bonds, and government securities. NPS is ideal for salaried individuals who want tax benefits beyond the ₹1.5L Section 80C limit, want a disciplined long-term retirement corpus, and are comfortable with market-linked returns. Government employees are mandatorily enrolled, while private sector employees and self-employed individuals can join voluntarily.
Section 80CCD(1B) allows an additional deduction of ₹50,000 per year for NPS contributions, over and above the ₹1.5L limit under Section 80C. This means your total tax deduction can be up to ₹2L (₹1.5L under 80C + ₹50,000 under 80CCD(1B)). If you're in the 30% tax bracket, this saves ₹15,000+ in taxes annually just from this one section. Note: This benefit is available only under the Old Tax Regime, not the New Regime.
At retirement (age 60), you can withdraw 60% of your NPS corpus as a tax-free lump sum. The remaining 40% must be used to purchase an annuity plan from an IRDAI-approved insurer, which provides you with a monthly pension. The lump sum 60% is fully exempt from tax. The monthly pension received from the annuity is taxable as per your applicable income tax slab at that time.
For Tier 1 (pension account), the minimum annual contribution is ₹1,000 and minimum per-contribution is ₹500. There is no maximum contribution limit. For Tier 2 (savings account, no tax benefit), the minimum initial deposit is ₹1,000 with no minimum annual requirement thereafter. To get maximum tax benefit under Section 80CCD(1B), contribute at least ₹50,000 per year to NPS Tier 1.
Partial withdrawal from NPS Tier 1 is allowed after 3 years for specific purposes: children's higher education, marriage, purchase/construction of home, and treatment of critical illnesses. You can withdraw up to 25% of your own contributions (not employer contributions). You are allowed 3 partial withdrawals in your entire NPS tenure. Tier 2 is a voluntary savings account with no withdrawal restrictions — you can withdraw anytime.