SBI NPS Calculator

How to Use the SBI NPS Calculator

Using the SBI NPS Calculator is straightforward. Here's a step-by-step guide to help you estimate your pension and retirement corpus:

Step-by-Step Guide:

1. Enter Your Current Age

   Input your present age to determine how many years you can continue investing before retirement.

2. Select Your Retirement Age

   Choose the age you plan to invest under the NPS.

3. Define Your Contribution

   Enter how much you wish to contribute monthly, quarterly, or annually toward your NPS account.

4. Set Annual Contribution Increase

   Adjust the expected annual percentage increase in your contributions, if any.

5. Input Expected Rate of Return

   Specify the average annual return you expect from your NPS investments.

6. Review Projected Retirement Corpus

   Based on your inputs, the calculator will display your total investment, estimated returns, and accumulated corpus at retirement.

7. Choose Annuity Allocation

   Decide what percentage of the retirement corpus you want to invest in an annuity plan to receive a monthly pension post-retirement.

8. Set Annuity Interest Rate

   Define the interest rate expected from the annuity portion of your investment.

9. Get Your Results

   • Your total projected pension corpus
   • Monthly pension payout
   • Lump sum withdrawal amount
   • Tax savings accumulated over time
   • Visual graphs for easy understanding

NPS Calculator

Your Age

Years

18 Years 59 Years

Enter Your Age

Monthly Investment

₹

₹500 ₹10L

Enter Investment Per Month

Expected Return on Investment

%

5% 15%

Expected Return on Investment

Percentage of Corpus Allocated for Pension

%

40% 100%

Enter Corpus Percentage

Expected Return from Pension

%

5% 15%

Enter Annuity Return

₹0

Your Monthly Pension

View Plans

₹0

Your Monthly Pension

View Plans Your Pension Calculation

Your Pension Calculation

Total Investment

Returns Earned

Maturity Amount

Maturity Amount split (Lumpsum & Pension)

60%

Lumpsum Amount

At the age of 60 Yrs

40%

Pension Wealth

At the age of 60 Yrs

View Plans

SBI NPS Calculator Formula

Let’s understand how the NPS Calculator works using a simple example. We’ll break it down step by step so that anyone can follow it easily.

Example: Prateek is a 34-year-old man who has invested in the National Pension Scheme. His monthly contribution to the SBI NPS is ₹3,000. Let's assume the expected SBI NPS rate is 10% per annum. Prateek needs to add the pension amount for his remaining 26 years before retirement.

Step-by-Step Calculation:

1. Monthly Investment Total Over Time

   • Prateek invests ₹3,000 every month.
   • Total invested over 26 years = ₹3,000 × 12 months × 26 years = ₹9,36,000

2. Interest on Investment (Using Compound Interest Formula)

   We use the Future Value of SIP (Systematic Investment Plan) formula:

   FV=P×[((1+r/t)^n−1)/(r/t)]

   Where:

   P

   Monthly Contribution = ₹3,000

   r/t

   Monthly interest rate = 10% annual ÷ 12 months = 0.00833

   n

   Total number of months = 26 years × 12 = 312 months

   Let’s plug in the values:

   FV=3000×[(1+0.00833)^312-1 / 0.00833]

   This gives approximately ₹44,31,836 as the total maturity value at retirement.

Benefits of the SBI NPS Calculator

• Helps in Retirement Planning: Estimates total pension corpus based on contribution, age, and expected returns.
• Customizable Inputs: Allows adjustment of variables like monthly contribution, retirement age, annuity percentage, and rate of return.
• Tax Savings Insight: Shows potential tax benefits under Section 80CCD(1) and Section 80CCD(1B) of the Income Tax Act.
• Estimates Monthly Pension: Calculates the monthly annuity amount you may receive post-retirement.
• Instant and Easy to Use: Offers a user-friendly interface with immediate results – no login required.
• Scenario Comparison: Enables comparison of different retirement strategies (e.g., higher contributions, delayed retirement).
• Supports Financial Planning: Helps you decide how much to invest to achieve your retirement goals.
• Free and Accessible: Available online for free – accessible to both SBI customers and non-customers.

Why Use the SBI NPS Calculator?

The SBI NPS Calculator is a handy online tool to help you plan retirement. Here’s why it’s useful:

• Easy Planning: Helps you buy the best retirement plans effortlessly.
• Quick Estimates: Provides instant calculations of potential pension and lump sum amounts.
• User-Friendly: Simple and easy to use for anyone.
• Customizable Inputs: Allows you to input different scenarios and contributions.
• Future Planning: Aids in understanding how current contributions impact future benefits.
• Accessible Online: Available anytime, anywhere with internet access.
• Time-Saving: Reduces the need for manual calculations and complex spreadsheets.
• Educational: Helps you learn more about how the NPS works and its benefits.

NPS Tax Benefits

The National Pension Scheme (NPS) is more than just a retirement planning tool; it’s also a smart way to reduce your income tax. The tax deductions for NPS fall under three different sections of the Income Tax Act: 80CCD(1), 80CCD(1B), and 80CCD(2). Here's a breakdown of each with real-world examples.

1. Section 80CCD(1): Deduction on Employee’s Own Contribution

   • Who is eligible? Salaried and self-employed individuals contributing to NPS from their income.
   • How much can you claim? Up to 10% of your salary (Basic + Dearness Allowance) and up to 14% for self-employed.
   • Capped under: The overall limit of ₹1.5 lakh set by Section 80CCD(1), which also includes investments like ELSS, PPF, life insurance, etc.

   Example:

   • Neha earns a Basic Salary + DA totalling ₹7,80,000 annually.
   • 10% of ₹7,80,000 = ₹78,000
   • So, she can claim ₹78,000 as a deduction under Section 80CCD(1).

   But keep in mind, this ₹78,000 is part of the ₹1.5 lakh ceiling, so if Neha has already claimed that amount through other eligible investments, she can't claim this deduction again unless she restructures her portfolio.

2. Section 80CCD(1B): Exclusive Additional Deduction

   Who can claim it? Anyone investing in NPS, whether salaried or self-employed.

   How much is allowed? An extra deduction of up to ₹50,000, separate from the Section 80CCD(1) cap.

   Example:

   • Neha has already used her ₹1.5 lakh limit by investing in PPF, tax-saving mutual funds, and insurance.
   • She contributes an additional ₹50,000 to NPS, which she can claim separately under Section 80CCD(1B).
   • New tax-saving total so far: ₹78,000 + ₹50,000 = ₹1,28,000

3. Section 80CCD(2): Deduction for Employer’s Contribution

   Who qualifies? Salaried individuals whose employers contribute to their NPS account.

   How much is allowed?

   • Up to 10% of Basic + DA under the old tax regime.
   • Up to 14%, applicable under the new tax regime

   Not part of: The ₹1.5 lakh limit; it’s completely over and above other deductions.

   Example:

   • Neha’s Basic + DA is ₹11,70,000 annually.
   • Her employer contributes 10% of that, i.e., ₹1,17,000 to NPS.
   • This entire amount is deductible under Section 80CCD(2).
   • If Neha’s employer contributes under the new tax regime, i.e. 14% contribution, the deduction would be ₹1,63,800.

Summary

The SBI NPS Calculator is a valuable, free tool by the State Bank of India that helps users estimate their retirement savings, monthly pension, and tax benefits under the National Pension Scheme. By entering a few key inputs, you can visualise your financial future and make well-informed decisions about your retirement investments.