NPS Tax Benefit Calculator
Key takeaways
- ₹50,000 under 80CCD(1), ₹50,000 under 80CCD(1B) and ₹1.00 L under 80CCD(2) — ₹2.00 L of deductions in all, worth ₹62,400.00 at the 30% slab including cess.
- The ₹50,000 80CCD(1B) window is full, and the other ₹50,000 of own contribution falls under 80CCD(1), inside the ₹1.5 lakh 80C cap it shares with EPF, PPF and the rest.
- At ₹1.80 L of own contribution, 80CCD(1) would reach ₹1.20 L and 80CCD(1B) would add ₹50,000 — total deduction ₹2.70 L, saving ₹84,240.00.
This year’s NPS deduction, limb by limb
Caps as coded: 80CCD(1) ≤ min(10% of basic+DA, ₹1.5 L) · 80CCD(1B) ≤ ₹50,000 · 80CCD(2) ≤ 10% of basic+DA under the old regime and 14% under the new one, where it is the only limb that applies.
About the NPS Tax Benefit Calculator
The NPS Tax Benefit Calculator estimates the income-tax deduction available on this year's National Pension System contributions and the approximate rupee tax that saves, under the FY 2025-26 and 2026-27 rules — the Income-tax Act, 2025 renumbers Section 80CCD as Section 124 from April 2026 with the same limits. It is a different question from the NPS Calculator on this site, which projects the retirement corpus that contributions grow into — this page is about the current year's tax return.
Choose the tax regime and enter annual basic plus dearness allowance, your own annual NPS contribution, your employer's annual contribution, and your income-tax slab rate. Under the OLD regime your own contribution can be claimed two ways — Section 80CCD(1) and the additional Section 80CCD(1B) — while your employer's contribution is claimed separately under Section 80CCD(2). Under the NEW regime your own contribution earns no deduction at all, but the employer contribution still does, at a more generous 14%-of-salary cap against 10% under the old regime.
"Total deduction eligible" adds up every limb that applies under the chosen regime. "Estimated tax saved" multiplies that deduction by the slab rate and then by 1.04, layering on the 4% Health and Education Cess that applies to tax generally — so the rupee benefit is slightly more than a flat slab-rate calculation alone. The three bars show the deduction limb by limb, and under the new regime two of them sit at zero, which is the clearest statement of what that regime does to own contributions.
One caveat this page cannot resolve for you: Section 80CCD(1) sits WITHIN the overall Section 80C ceiling of ₹1,50,000, which is normally shared with PPF, ELSS, life insurance premiums and so on. This calculator has no visibility into those, so it applies the ₹1,50,000 cap to this limb in isolation. If part of that umbrella is already used elsewhere, the real 80CCD(1) room is smaller than what is shown. Section 80CCD(1B)'s extra ₹50,000 is genuinely additional and does not share room with 80C, which is why the calculator fills it first; the total is the same whichever limb is filled first.
Frequently asked questions
How much tax deduction does NPS give in FY 2025-26 and 2026-27?
Under the old regime, as coded here: 80CCD(1B) takes the first ₹50,000 of your own contribution; 80CCD(1) allows the smallest of the rest, 10% of basic plus DA, and ₹1,50,000; and 80CCD(2) allows the employer contribution up to 10% of basic plus DA. Under the new regime only 80CCD(2) applies, capped at 14% of basic plus DA.
Can I claim NPS deductions under the new tax regime?
Only the employer contribution, under Section 80CCD(2), and at a higher 14%-of-salary cap than the old regime's 10%. Your own contributions under 80CCD(1) and 80CCD(1B) get no deduction at all in the new regime. Setting the regime dropdown on this page shows exactly what that costs at your numbers.
What is the extra ₹50,000 NPS deduction?
Section 80CCD(1B), available under the old regime only. It takes up to ₹50,000 of own contribution, and — unlike 80CCD(1) — it does not share room with the ₹1,50,000 Section 80C umbrella, which is what makes it genuinely additional.
Why does my 80CCD(1) deduction stop below my actual contribution?
Because that limb is capped at the smallest of three figures, and one of them has bitten: either 10% of your basic plus DA, or the flat ₹1,50,000 ceiling. The limb bars on this page show the figure each cap actually produced, and the Key takeaways card names which one applied.
Does the ₹1,50,000 cap include my PPF and ELSS?
In law, yes — Section 80CCD(1) shares the ₹1,50,000 ceiling with the rest of Section 80C. This calculator does not ask about your other 80C investments and so applies the cap to the NPS limb alone. If you already use part of that ceiling elsewhere, your real 80CCD(1) room is lower than what this page shows.
How is the tax saving figure worked out?
Total deduction × slab rate ÷ 100 × 1.04. The final factor is the 4% Health and Education Cess, which applies to tax and therefore to tax saved. It does not model surcharge, and it assumes the whole deduction falls in the slab rate entered — if a deduction straddles two slabs the real saving is a little lower.
Disclaimer: This calculator is for information and education only. It is not investment advice and not a recommendation, and it is not tax or legal advice. It applies the tax rules the calculator describes, in simplified form; the rules change with each Budget and notification, and the actual liability depends on your full facts, the deductions you are entitled to and the law in force. Every figure is computed solely by applying the formula and assumptions stated on this page to the inputs you entered.