How much pension will I get from NPS?

Lesson 16 of 28 · NPS: pension and lump sum · 4 min read · Reviewed 15 Oct 2026

Quick answer

At 60, part of your NPS comes out as a tax-free lump sum and the rest buys an annuity that pays a monthly pension. ₹10,000 a month for 25 years at 10% builds about ₹1.34 crore. With 40% in an annuity at 6%, the pension is about ₹26,800 a month.

NPS (National Pension System) is a low-cost retirement account regulated by PFRDA. You choose how much goes into equity, corporate bonds and government bonds.

At 60 you take part of it as a lump sum and use the rest to buy an annuity from an insurer, which pays a pension for life.

Key idea: Under the old regime, an extra ₹50,000 a year in NPS is deductible over and above 80C. Check PFRDA for the current exit rules before you plan.

Try the calculator and the one-question quiz on this page to check your own numbers.

Common questions

Can I withdraw before 60?

Partial withdrawals are allowed for set reasons such as education, a home or illness, after a minimum period. Full early exit requires more of the money to go into an annuity.

Is the pension taxed?

Yes. Annuity income is added to your income and taxed at your slab rate.

Does my employer’s NPS contribution help?

Yes. In the new regime, employer contributions up to 14% of basic salary are deductible for private-sector employees.

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