# Annuity Calculator: Monthly Pension and Tax > Annuity calculator for India. See the monthly pension a corpus buys at your annuity rate, or the corpus for a target pension, with tax and inflation. Source: https://trykosh.com/tools/annuity-calculator Free tool - Salary and retirement # Annuity calculator: monthly pension from your corpus An annuity turns a lump sum into a pension paid for life. Enter the amount and the annuity rate an insurer quotes to see your monthly pension, the tax on it, and what it will be worth in real terms as prices rise. Rules checked 25 October 2026Free - no sign-upRuns in your browser Monthly pension INR 29,167 INR 3,50,000 a year - INR 29,167 a month after tax Yearly pension**INR 3,50,000** Tax on it a year**INR 0** Worth in 20 years (today's money)**INR 9,094** Purchase price INR 50,00,000 x annuity rate 7% INR 3,50,000 a year Monthly pension before tax INR 29,167 Income tax on the annuity (new regime, 60+) INR 0 a year Monthly pension after tax INR 29,167 A level pension loses value to 6% inflation When Pension paid Worth in today's money Year 1 INR 29,167 INR 29,167 After 5 years INR 29,167 INR 21,795 After 10 years INR 29,167 INR 16,287 After 15 years INR 29,167 INR 12,170 After 20 years INR 29,167 INR 9,094 After 25 years INR 29,167 INR 6,796 No tax here: in the new regime, total income up to INR 12 lakh is covered by the 87A rebate. ## Upload your statement and Kosh does this for you. Upload your statements and Kosh maps your salary, PF and savings, then tells you whether you're on track for retirement, month by month. [Start free](/signup?via=tool-annuity-calculator) ## How the annuity calculator works Insurers quote an annuity rate: the yearly pension as a percentage of the purchase price. Monthly pension = purchase price x annuity rate / 12. On INR 50 lakh at 7%, that is INR 3.5 lakh a year, or INR 29,167 a month. Flip it to find the corpus a target pension needs: corpus = monthly pension x 12 / annuity rate. The rate depends on your age when you buy, the option you pick and the insurer. Life annuity without return of purchase price pays the most; options that return the purchase price to your nominee, cover a spouse for life (joint life) or raise the pension each year pay noticeably less. Compare quotes for the same option. Annuity income is taxed at your slab rate as it is received. The calculator adds it to your other taxable income and works out the extra tax in the new regime for someone aged 60 or more, including the 87A rebate that makes total income up to INR 12 lakh tax-free. Only the pension is taxed, not the purchase price. Most annuities pay a fixed amount for life, which inflation slowly erodes. The table shows what the same pension will buy in today's money after 5, 10 and up to 25 years. At 6% inflation, a level pension loses about two-thirds of its buying power over 20 years, so many retirees annuitise only part of their corpus. Monthly pension = purchase price x annuity rate / 12 - Corpus needed = monthly pension x 12 / annuity rate Annuity rate yearly payout as a % of the purchase price, quoted by the insurer ## Worked example: Mr Iyer, 62, buying an annuity with INR 1.2 crore Mr Iyer, 62, puts INR 1.2 crore into an annuity quoted at 7.2%, giving INR 8,64,000 a year or INR 72,000 a month. He also has INR 6 lakh a year of interest income. Together that is INR 14.64 lakh, above the INR 12 lakh rebate limit, so the annuity costs him INR 1,03,584 a year in tax and leaves INR 63,368 a month. At 6% inflation, INR 72,000 in 20 years will buy only what INR 22,450 buys today. Monthly pension INR 72,000 INR 8,64,000 a year - INR 63,368 a month after tax Yearly pension**INR 8,64,000** Tax on it a year**INR 1,03,584** Worth in 20 years (today's money)**INR 22,450** Purchase price INR 1,20,00,000 x annuity rate 7.2% INR 8,64,000 a year Monthly pension before tax INR 72,000 Income tax on the annuity (new regime, 60+) INR 1,03,584 a year Monthly pension after tax INR 63,368 Annuity income is added to your other income and taxed at your slab rate. Only the payout is taxed, not the corpus. [Load this example into the calculator ->](?corpus=12000000&rate=7.2&other=600000#calculator) ## Good to know - NPS requires part of your corpus at exit to buy an annuity from an empanelled insurer. PFRDA revised the exit and withdrawal rules in 2025, so check the current share and options with PFRDA before you plan. - Annuity rates are locked when you buy. Buying in tranches over a few years spreads the risk of locking in when rates are low. - Most immediate annuities can't be surrendered once the free-look period ends. Treat the purchase as permanent. - If your total income stays within INR 12 lakh, the 87A rebate in the new regime makes annuity income effectively tax-free. Above that, slab tax applies to every rupee of pension. ## Frequently asked questions How is annuity calculated? Multiply the purchase price by the annuity rate the insurer quotes, then divide by 12 for a monthly figure. INR 30 lakh at 7% gives INR 2.1 lakh a year, or INR 17,500 a month. The rate depends on your age, the option chosen and the insurer. Is annuity income taxable in India? Yes. The pension is added to your income each year and taxed at your slab rate. In the new regime, total income up to INR 12 lakh pays no tax because of the 87A rebate, so a modest annuity may not be taxed at all. How much corpus do I need for INR 50,000 a month pension? At a 7% annuity rate, about INR 85.7 lakh (INR 50,000 x 12 / 7%). At 6%, you'd need INR 1 crore. Remember that a level pension of INR 50,000 will buy far less in 15 or 20 years. What are the main types of annuity? Immediate annuities start paying right away; deferred annuities start later. Within these, you can choose life only, life with return of purchase price to your nominee, joint life with your spouse, or a pension that increases each year. Options that give more protection pay a lower rate. Is an annuity better than an SWP from mutual funds? They solve different problems. An annuity guarantees income for life but is usually fixed and can't be undone. A systematic withdrawal plan keeps the money invested and flexible but can run out if returns disappoint. Many retirees use a mix of both. ## Sources and assumptions - [PFRDA (NPS)](https://www.pfrda.org.in/) - [IRDAI (Insurance Regulatory and Development Authority of India)](https://irdai.gov.in/) - [Income Tax Department](https://www.incometax.gov.in/) Rules and rates last checked on 25 October 2026. Results are estimates for planning and education, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting.