Annuity Calculator India — Monthly Pension from Lump Sum 2026

Last updated: 29 April 2026 Reviewed by Deepa Krishnan, CFP

An **annuity** converts a lump sum corpus into a guaranteed monthly income for life (or a fixed period). Indian insurers offer annuity rates of 5.5–7% p.a. for immediate annuities, depending on the type (life annuity, joint life, with/without return of purchase price). NPS mandates 40% of corpus go into an annuity. This calculator helps you estimate the monthly pension.

Annuity Purchase Price (₹)

Annuity Rate (% p.a.) Current IRDAI-guided annuity rates 5.5–7%

Annuity Type

Monthly Annuity Payout —

Annual Annuity Income —

Investment Return Component —

Effective Annuity Yield —

View Year-by-Year Breakdown

Real-World Examples — 2026

₹20 lakh NPS annuity corpus at 6%

₹20 lakh annuity at 6% (life annuity): ₹10,000/month = ₹1,20,000/year. With Return of Purchase Price (ROP): ₹8,500/month (lower payout, but family gets ₹20 lakh on death). Joint life with ROP: ₹7,800/month — spouse also protected.

₹50 lakh corpus — comparing options

₹50 lakh single life annuity at 6%: ₹25,000/month. With 3% increasing: starts at ₹22,000/month, reaches ₹37,000 after 20 years. If you live 20+ years, increasing annuity wins against inflation. Buy at least 40% of annuity corpus with inflation-increasing option.

Frequently Asked Questions

What is an annuity and how does it work in India?

An annuity is a contract where you pay a lump sum to an insurance company and receive regular pension payments (monthly/quarterly/annual) for life or a fixed period. In India, annuities are offered by life insurers like LIC, SBI Life, HDFC Life. NPS mandates 40% of corpus into annuity at retirement.

What is the annuity rate in India 2026?

Annuity rates in India range from 5.5% to 7% p.a. depending on the insurer, annuity type, and purchase age. Immediate annuity rates are higher for older buyers. LIC's Jeevan Akshay VII offers 6–7% for single life annuity. HDFC Life and SBI Life offer comparable rates.

Is annuity income taxable in India?

Yes. Annuity income is fully taxable as 'income from other sources' at your applicable slab rate. There is no special exemption for annuity income. This is different from EPF/PPF maturity which can be tax-free. Factor in tax while planning your retirement income from annuities.

Is this calculator free?

Yes, completely free on CalcPhi.

Are my inputs stored?

No. Calculations run in your browser.

Is it mobile-friendly?

Yes. Works on all modern smartphones.