NPS Calculator 2026 with Vatsalya

NPS Vatsalya is a scheme launched on 18 September 2024 allowing parents/guardians to open NPS Tier I account for minor children. Per Budget 2025: contributions up to ₹50,000/year qualify under Section 80CCD(1B), for up to 2 minor children. Limit ₹50K is cumulative across your own NPS and Vatsalya contributions. At age 18, account auto-converts to regular NPS in child's name. Withdrawals before 18 are limited and taxable (except for death of minor). Effective AY 2026-27 onwards.

Since FY 2024-25, the 80CCD(2) limit is 14% of Basic+DA for anyone taxed under the new regime (private or Government). Under the old regime it is 10% for private-sector employees and 14% for Government employees. The deduction is: (a) Over and above the ₹1.5L 80CCE ceiling, (b) Available in BOTH regimes, (c) Most impactful in the new regime where self-contributions don't qualify. Example: Basic+DA ₹50K/month → up to ₹7,000/month (14%) deductible in the new regime, ₹5,000/month (10%) in the old regime. Employer PF + NPS + superannuation above ₹7.5 lakh a year is taxable as a perquisite.

YES, but ONLY in Old Regime:
• Section 80CCD(1) → ₹1.5L (within 80C umbrella)
• Section 80CCD(1B) → ₹50K EXTRA
Total ₹2L self-deduction. At 30% slab + 4% cess = ₹62,400 annual tax saved. PLUS employer's NPS contribution u/s 80CCD(2) — separate, capped at 10% of Basic+DA (old regime, private sector), subject to the ₹7.5L aggregate employer-contribution limit.

In New Regime: ONLY employer contribution u/s 80CCD(2) qualifies. Self contribution gets no deduction.

In New Regime FY 2025-26 onwards, salaried with optimum structuring:
✓ Section 87A rebate up to ₹12L income (zero tax)
✓ Standard deduction ₹75K (effectively raises to ₹12.75L)
✓ Employer NPS up to 14% of Basic (assuming Basic ₹6.5L → ₹91K)
= ~₹13.7L CTC with nil tax

Marginal relief covers slightly higher incomes. Employer NPS is available only if your employer offers it as part of the salary structure; it is locked in till 60 like any NPS money.

From FY 2026-27 onwards, Section 80CCD of Income Tax Act 1961 replaced by Section 124 of Income Tax Act 2025, covering own contribution, the additional ₹50K and employer contribution. Substantive rules unchanged.
Returns for FY 2025-26 (AY 2026-27) still use Section 80CCD references (1961 Act year). From tax year 2026-27, the 2025 Act section numbers apply.

Limited withdrawals allowed for: (a) Child's education (after 3 years of account opening), (b) Treatment of specified illnesses, (c) Disability of guardian. Max 25% of own contribution. Partial withdrawal up to 25% of contributions is exempt (s.10(12BA)); on final withdrawal, amounts on which you claimed a deduction become taxable. Otherwise, money locks till age 18 when account converts to regular NPS.

Quick 2026 comparison:
NPS: Lock till 60 (or 18 for Vatsalya). 9-11% return. ₹2L self + employer 14% tax benefit. 60% of corpus tax-free as lump sum; minimum annuity 20% (non-Govt, from Dec 2025) or 40% (Govt); pension taxable. Best for retirement.
PPF: 15-year lock. 7.1% guaranteed. ₹1.5L u/s 80C. EEE tax-free maturity. Best for risk-averse.
ELSS: 3-year lock. 10-15% historical. ₹1.5L u/s 80C. LTCG 12.5% above ₹1.25L. Best for liquidity + growth.

Optimal mix: Both regimes — use employer NPS if offered (14% new regime / 10% old regime). Old regime — add PPF + ELSS for ₹1.5L 80C + ₹50K NPS(1B).