📐 Formula Used
Corpus = Monthly Contribution × [(1+r)^n – 1] / r Annuity Corpus = Total Corpus × 40% Monthly Pension = Annuity Corpus × 6% / 12
Frequently Asked Questions
What is NPS?
NPS (National Pension System) is a government-sponsored pension scheme for Indian citizens. It invests in equities, bonds, and government securities to build a retirement corpus.
What is the NPS contribution limit?
Min: ₹500/month (Tier 1). No maximum. Employee contribution up to 10% of salary is tax-deductible under 80CCD(1). Additional ₹50,000 under 80CCD(1B).
How much pension will I get from NPS?
At retirement, you must use minimum 40% of corpus to buy an annuity. The monthly pension depends on corpus size and annuity rate (~6% p.a. currently).
What is the annuity rate in NPS?
Annuity rates from PFRDA-approved insurers typically range from 5.5% to 6.5% p.a. depending on the annuity type and insurer.