# NPS Tips: What will be the effect after increasing the NPS Contribution Limit, know here...

**NPS Contribution Limit Increase: **On Tuesday, 23 July, the first full budget of the NDA government was presented. In this budget, some changes were also announced in NPS. According to the new rule, under the National Pension System, now employers will deduct up to 14 percent instead of 10 percent from the basic salary of the employees. That is, the employed people who used to contribute 10% in this scheme till now, will now have to contribute 14 percent. What effect will this have on them? Let us understand the calculation for a salary of Rs 50,000.

**How much contribution will have to be made on a salary of 50,000**

Suppose your salary is Rs 50,000, then now according to 14 percent, you have to contribute Rs 7,000 every month in NPS, whereas earlier you used to contribute Rs 5,000 at the rate of 10%. In this way, an additional burden of Rs 2,000 will come on you. However, if you look at it from the perspective of the future, it is only beneficial for you. If you contribute more, you will be able to accumulate more corpus on retirement and will also be able to get more pension. However, you may face some challenges in managing the monthly budget because the necessary expenses of the middle class are met from their salary. In such a situation, you may need to manage your expenses.

**How much retirement fund will be created and how much pension**

If you contribute 14% every month on a salary of Rs 50,000, then how much money will you get on retirement and how much pension will you get at the rate of Rs 7,000? This question is bound to come to mind. Understand it through calculation - Suppose your age is 28 years and your salary is Rs 50,000. You invested Rs 7,000 in this scheme every month at the rate of 14 percent and continued this investment till the age of 60. In this case, your total investment in 32 years will be Rs 26,88,000.

If you calculate according to a 10% return, then your total corpus is Rs 1,96,58,348. You get 60% of this amount as a retirement fund. In this case, 60% of Rs 1,96,58,348 is Rs 1,17,95,008 which you will get as a retirement fund at the age of 60. Out of this, 40% i.e. Rs 78,63,340 will go into an annuity. If you calculate assuming an annuity rate of 6%, then at the age of 60 you will get Rs 39,317 every month as pension.

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