The Pension Fund Regulatory and Development Authority’s (PFRDA) NPS Prosperity Planner (NPP) helps individuals calculate their retirement income based on annuity options and contributions to the National Pension System (NPS ).
The facility announced on December 9, 2022, in a PFRDA circular, is available for individuals through the three central recordkeeping agencies (CRAs)—Protean (formerly NSDL), Fintech, and CAMS.
The NPS Prosperity Planner was launched as part of the Azadi Ka Amrit Mahotsav, commemorating India’s 75 years of independence, and is aimed at assisting and empowering subscribers to plan for adequate retirement income.
How To Access The Calculator
Individuals access the calculator after logging in to their NPS account with the respective central recordkeeping agencies.
The calculator will compute a possible retirement income based on the individual’s contributions and projected rise in salary, among other factors.
The PFRDA circular said, “NPP provides the tool for higher retirement income through accelerated contribution plan in the residual period until retirement duly considering inflation and the projected cost of living expenses.”
“NPS Prosperity Planner is futuristic and offers personalized retirement planning for the subscribers based on their past contribution, expected income rise in the future, and their cost of living,” the Economic Times quoted the circular as saying.
PFRDA said the calculator offers subscribers a realistic retirement income projection and helps them prepare for a better sustainable income strategy.
NPS is a voluntary defined pension scheme for Indian citizens between 18 and 70 years, subject to certain conditions.
It offers various savings and tax benefits. The subscriber can withdraw the NPS corpus as a lump sum or annuity after they turn 60 or older.
As per the Income Tax Act, 1961, a lump sum withdrawal of 60 per cent of the corpus is exempted from income tax. However, the remaining 40 per cent (used for buying an annuity) is taxable when the subscriber receives the annuity.
In addition, the subscriber may choose to annuitize the entire corpus (100 per cent) without withdrawing the lump sum amount.
The person can also postpone the lump sum withdrawal till 75 years of age or defer annuitisation up to three years.
During the accumulation period, an NPS subscriber can avail of a maximum deduction of Rs 2 lakh in a financial year under the Income Tax Act.
