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NPS Calculators

NPS (National Pension System) is India's market-linked pension scheme. It has unique tax benefits, mandatory annuity rules, and a distinctive asset allocation system.

NPS Projection

NPS allows you to allocate between:

  • Equity (E): Market-linked, up to 75% for Tier I before age 50
  • Corporate bonds (C)
  • Government securities (G)

The projection uses a blended return:

blended_return = equity_alloc × equity_return + (1 - equity_alloc) × debt_return

Default assumptions: equity return 11%, debt return 7%.

At retirement (age 60), you must use at least 40% of the corpus to buy an annuity. The remaining 60% is tax-free as a lumpsum.

NPS Annuity Calculator

The annuity corpus (40% of total) buys a lifetime pension. The monthly pension is:

monthly_pension = (annuity_corpus × annuity_rate) / 12

Annuity rates currently range from 5.5–7% depending on the provider and annuity type (life, joint life, with/without return of corpus).

Important: The annuity income is fully taxable as income.

NPS vs Alternatives

This calculator compares three strategies for the same monthly contribution over the same period:

  1. NPS: Blended return, 40% forced annuity, 60% tax-free lumpsum
  2. Equity MF (ELSS or index): Full market return, 12.5% LTCG above ₹1.25L exemption
  3. PPF (capped at ₹1.5L/year): 7.1% tax-free, but capped contribution

When NPS wins:

  • High income (30% tax slab) — the 80CCD(1B) ₹50K extra deduction is powerful
  • Long horizon (25+ years) — the blended equity allocation at 75% competes with MF
  • If you want forced pension discipline

When MF wins:

  • Full liquidity needed (no lock-in until 60)
  • Returns above 12% historically beat NPS blended return
  • LTCG exemption of ₹1.25L/year reduces effective tax

Combined strategy: Many planners use NPS for the tax deduction + forced pension, and MF for flexible wealth building. The platform's AI advisor can model your specific situation.