Section 123 ₹50,000 · additional Section 124(3) ₹50,000 · employer deduction ₹80,000 · total ₹180,000
Finance
NPS Tax Benefit Calculator
Estimate NPS deductions for own and employer contributions under Tax Year 2026-27 rules.
Free to use No account required Browser calculation
Advertisement
Input
ReadyEnter your values
Enter the values for this calculator. We’ll show the answer, the method and the formula together.
Calculation method
Formula & methodology
The result above is backed by the calculator-specific formulas and assumptions shown here.
Employee own contribution inside Section 123
min(Own NPS, 10% × Salary, Remaining Section 123 room)Self-employed own contribution inside Section 123
min(Own NPS, 20% × Gross total income, Remaining Section 123 room)Additional own-contribution deduction
min(Unclaimed own NPS, ₹50,000)Employer contribution deduction
min(Employer NPS, applicable 10% / 14% salary cap)Method & assumptions
For Tax Year 2026-27, the calculator uses Section 124 of the Income-tax Act, 2025 while retaining the familiar legacy “80CCD” wording only in search terms and explanatory content.
Under the normal regime, an employee’s own NPS contribution can first use remaining Section 123 room subject to a 10% salary cap. A self-employed/other individual uses a 20% gross-total-income cap for that Section 123 bucket.
After the Section 123 portion is allocated, up to ₹50,000 of the remaining own NPS contribution can be counted under the additional Section 124(3) bucket. The same rupee is never counted in both buckets.
Employer NPS is calculated separately. Central/State Government employers use a 14% salary cap. Other employers use 10% under the normal regime and 14% under the selected new regime.
Under the selected new regime, this calculator returns zero for the own-contribution Section 123 and additional Section 124(3) deductions. Employer NPS can remain deductible for employees subject to the applicable 14% cap.
Salary for employee NPS purposes is Basic plus qualifying DA. The user must include DA only when the applicable employment terms make it part of salary for this purpose.
This calculator does not model NPS withdrawals, annuity taxation, investment returns, retirement corpus or NPS Vatsalya treatment.
Important assumption
This is an educational Tax Year 2026-27 estimate, not tax, legal or investment advice. Confirm contribution eligibility, salary treatment and employer reporting from current official material or a qualified tax professional before filing.
Official referencesIncome Tax Department — Income-tax Act, 2025 as amended by Finance Act 2026Primary current-law source for Section 124 and the retained new-regime employer-contribution provisions.PFRDA — NPS for CorporatesIndependent NPS authority reference for the contribution-deduction framework.
Examples
Worked examples
Examples use this calculator’s own inputs and outputs, not generic page filler.
Own-contribution deduction ₹0 · employer cap ₹112,000 · employer deduction ₹100,000
Section 123 ₹150,000 · additional Section 124(3) ₹50,000 · total ₹200,000
14% employer cap ₹112,000 · employer deduction ₹112,000
Help & assumptions
Frequently asked questions
Important assumptions and practical details for this calculator.
Is the extra ₹50,000 NPS deduction available in the new regime?+
No. In this Tax Year 2026-27 calculator, the additional own-contribution Section 124(3) deduction is available only under the normal regime. The selected new regime returns zero for that own-contribution bucket.
Is employer NPS deductible in the new regime?+
Yes for employees within this calculator’s scope. The employer contribution can remain deductible subject to a 14% salary cap under the selected new regime.
What salary does the calculator use?+
For an employee, salary is Basic plus qualifying DA. Include DA only when it qualifies under the applicable employment terms for the NPS deduction rule.
Can self-employed taxpayers claim NPS deductions?+
Under the normal regime, this calculator applies the Section 123 own-contribution bucket up to 20% of gross total income and remaining ₹1.5 lakh capacity, then the additional Section 124(3) bucket up to ₹50,000.
Does NPS share the ₹1.5 lakh Section 123 limit?+
The normal-regime own-contribution portion can use the same ₹1.5 lakh Section 123 basket. That is why the calculator asks how much of the Section 123 limit has already been used elsewhere.
Can the same NPS contribution be claimed twice?+
No. The calculator first allocates any eligible own contribution to Section 123 and then applies the additional ₹50,000 bucket only to the remaining own contribution.
Does this calculator cover NPS Vatsalya, withdrawals or annuity taxation?+
No. Those topics are outside the v1 scope of this calculator and can involve separate rules.
Advertisement