NPS Tier 2 Calculator 2026 with After-Tax Returns
See what NPS Tier 2 actually delivers after tax, its gains are taxed at your full income slab with no capital-gains concession, unlike an equity mutual fund. Compare the two head to head, factor in Tier 2’s ultra-low expense ratio, and check whether the Central Government 80C exception flips the verdict.
After-Tax Model: Tier 2 Slab Tax vs Equity Fund LTCG
NPS Tier 2: The Tax Catch That Changes Everything
NPS Tier 2 is genuinely one of the most misunderstood products in the entire Indian personal finance landscape. It is marketed, correctly, as a mutual-fund-like wrapper with rock-bottom expense ratios and complete liquidity for private investors.
Those features are entirely real and genuinely attractive to cost-conscious investors. What gets glossed over in nearly every comparison is the single factor that determines whether Tier 2 is actually a good deal: how the gains are taxed when you withdraw.
Here is the crux. When you redeem an equity mutual fund held for more than a year, your gains are taxed at a concessional 12.5% long-term capital gains rate, and the first Rs 1.25 lakh of long-term gains each year is exempt.
When you withdraw from NPS Tier 2, the entire gain is added to your income and taxed at your slab rate, which for a high earner is 30% plus surcharge and cess. There is no indexation, no exemption, and no concessional rate. This is the decisive difference, and it means that for the same gross return, an equity mutual fund can leave a 30% slab investor with substantially more money after tax.
This calculator makes that comparison concrete. It grows both a Tier 2 investment and an equity mutual fund at the same gross return, subtracts each one’s expense ratio, then applies the correct tax to each: slab rate on the full Tier 2 gain, and 12.5% LTCG above the Rs 1.25 lakh exemption on the mutual fund. The result shows which vehicle actually leaves you richer, and by how much. To model your Tier 1 retirement contributions separately, use our PF vs NPS calculator, and to compare equity fund plans see our regular vs direct mutual fund calculator. For the full account-structure picture, our NPS Tier 1 vs Tier 2 guide explains the rules in depth.
It is worth putting the tax difference in perspective with a simple mental model. Think of two investors who both earn the same gross return on Indian equities. One uses NPS Tier 2, the other a direct equity mutual fund. Their money grows almost identically before tax, with Tier 2 slightly ahead because of its lower expense ratio. The divergence happens entirely at the exit. The mutual fund investor hands over 12.5% of their gains above the exemption; the Tier 2 investor hands over their full slab rate, which at 30% is more than double. Over a large corpus built across two decades, that difference in the exit tax translates into lakhs of rupees. The lower expense ratio simply cannot compensate for a tax rate that is more than twice as high on the gains.
How the After-Tax Comparison Works
Grow both at the same gross return
Tier 2 and an equity mutual fund invested in the same assets earn broadly the same gross return. The calculator applies your expected return to both, whether you invest via a monthly SIP or a one-time lumpsum, over your chosen horizon.
Subtract each vehicle’s expense ratio
Tier 2’s expense ratio is tiny, typically 0.01 to 0.09%, while a direct equity mutual fund charges around 0.3 to 1.0%. The calculator nets each one’s cost from the gross return, which gives Tier 2 a small compounding edge before tax.
Apply the correct tax to each
Tier 2 gains are taxed at your full slab rate with no exemption. The equity mutual fund pays 12.5% LTCG only on gains above the Rs 1.25 lakh annual exemption. This is where the mutual fund usually claws back and overtakes Tier 2 for a high-slab investor.
Add the government 80C benefit if applicable
If you are a Central Government employee, your Tier 2 contributions qualify for Section 80C (with a 3-year lock-in on the notified default scheme). The calculator adds this upfront tax saving to Tier 2’s net, which often reverses the verdict in Tier 2’s favour.
The comparison deliberately holds the gross return equal between Tier 2 and the equity mutual fund, because both can invest in the same underlying equities. The differences that matter are the two things you can actually control or predict: the expense ratio, which favours Tier 2, and the tax treatment, which favours the equity fund for private investors.
The government 80C benefit is the third factor, available only to a specific group. By isolating these three levers, the calculator shows exactly why the answer is different for a private-sector professional and a Central Government employee.
There is also a subtler point about how the two products handle rebalancing. Within NPS Tier 2, you can switch between fund managers or shift your asset allocation without triggering a taxable event, because a switch inside NPS is not treated as a redemption. In a taxable mutual fund portfolio, by contrast, selling one fund to buy another realises capital gains and triggers tax. For an investor who rebalances frequently, this tax-deferral feature of Tier 2 has genuine value that a simple buy-and-hold comparison does not capture. However, for a long-term buy-and-hold equity investor who rarely switches, this advantage rarely comes into play, and the exit-tax disadvantage dominates the outcome as the calculator shows.
What Are the Tier 2 Rules and Tax Facts?
The table below sets out the key features and tax treatment of NPS Tier 2, drawn from PFRDA rules and the current tax position. These are the facts the calculator applies.
| Feature | NPS Tier 2 |
|---|---|
| Lock-in (private investors) | None, withdraw any business day |
| Lock-in (Central Govt, for 80C) | 3 years on notified default scheme |
| Minimum contribution | Rs 250 |
| Prerequisite | Active Tier 1 account required |
| Expense ratio | 0.01 to 0.09% (ultra-low) |
| Tax deduction on contribution | None (except Central Govt 80C) |
| Tax on gains at withdrawal | Slab rate, no LTCG, no indexation |
| Fund managers | Same 8 as Tier 1 (SBI, UTI, LIC, etc.) |
| Asset classes | Equity, corporate debt, govt bonds, alternatives |
| Death before 60 | Full corpus tax-free to nominee |
The taxation point in the table deserves particular emphasis, because it is exactly where Tier 2 diverges most sharply from what most investors expect it to do. Since Tier 2 is often described as a mutual-fund-like product, many assume it enjoys mutual-fund tax treatment. It does not. The gains are treated as ordinary income and taxed at the slab rate, a point confirmed by pension fund houses and tax professionals. This is the same treatment that debt mutual funds received after April 2023, so against a debt fund, Tier 2’s lower cost makes it competitive, but against an equity fund with its 12.5% LTCG rate, Tier 2 is at a structural tax disadvantage. You can verify the tax rules on the Income Tax Department portal and the scheme rules with the PFRDA.
How Investors in Mumbai, Bengaluru and Pune Decided
These three investors each face a meaningfully different combination of employer type, income tax slab, and investment horizon, and the after-tax verdict differs for each. The after-tax numbers show exactly when Tier 2 is worth it and when an equity mutual fund wins.
Rohit is a private-sector professional in Mumbai in the 30% tax bracket. He is drawn to NPS Tier 2 because of its famously low expense ratio and wants to run a Rs 15,000 monthly SIP for 20 years at an expected 11% gross return.
He assumes the low cost makes Tier 2 the obvious winner over a mutual fund. The numbers say otherwise.
Rohit’s Tier 2 grows slightly faster before tax because of its lower expense ratio, reaching a marginally higher gross corpus than the mutual fund. But at withdrawal, his entire Tier 2 gain is taxed at 30%, costing him about Rs 28.25 lakh in tax.
The equity mutual fund, taxed at just 12.5% LTCG above the Rs 1.25 lakh exemption, pays only about Rs 10.47 lakh. That tax gap of nearly Rs 18 lakh dwarfs the small expense-ratio saving, so the mutual fund leaves Rohit with Rs 8,64,486 more. His post-tax CAGR is 5.34% on Tier 2 versus 5.77% on the fund.
Rohit’s case is the most common one on the internet, and it is precisely where the conventional wisdom goes wrong. Search results and finance videos endlessly praise Tier 2’s low cost, and a cost-only comparison does favour it. But almost none of that content runs the after-tax numbers, which is where the equity fund pulls decisively ahead for a high-slab private investor. Rohit’s instinct to chase the lower expense ratio is understandable, but the tax treatment is the variable that actually determines his outcome, and it points the other way.
Anjali is a Central Government employee in Bengaluru, also in the 30% slab. She can invest in the notified Tier 2 default scheme and claim Section 80C on her contributions, accepting the 3-year lock-in.
She runs a Rs 12,500 monthly SIP (Rs 1.5 lakh a year, the 80C limit) for 15 years at 10% gross. For her, the maths is completely different from Rohit’s.
Anjali’s Tier 2 gains are still taxed at her 30% slab on withdrawal, just like Rohit’s. But because she is a Central Government employee, she claims a Section 80C deduction of Rs 1.5 lakh every year for 15 years.
At her 30% slab, that saves her Rs 45,000 a year, a total of Rs 6,75,000 over the period. This upfront tax saving more than offsets the slab tax on her gains, so her Tier 2 net of Rs 49,89,942 beats the equity mutual fund’s Rs 46,21,968 by Rs 3,67,974. The 80C benefit is the deciding factor, and it is available only to government employees.
Anjali’s example is the crucial counterpoint that the private-investor cases can obscure. The exact same product, taxed the exact same way on its gains, produces the opposite verdict for her purely because of who her employer is. This is why blanket statements like Tier 2 is good or Tier 2 is bad are unhelpful. The right answer is entirely conditional on your employer type and, for government employees, on which tax regime you have chosen, since the new regime removes the 80C benefit that makes Tier 2 work for her.
Sameer is a private investor in Pune in the 20% tax bracket.
He has Rs 3 lakh to invest as a one-time lumpsum for a 5-year horizon at an expected 9% gross return. His lower slab and shorter horizon make the comparison much closer than Rohit’s, and he wants to see whether Tier 2’s cost advantage can win at a lower tax rate.
At Sameer’s 20% slab, the tax gap between Tier 2 and the equity fund is narrower than at 30%, and over just 5 years the absolute gains are smaller, so the mutual fund’s Rs 1.25 lakh LTCG exemption covers a larger share of its gains. The result is a close call: the equity mutual fund still wins, but by only Rs 17,595.
His post-tax CAGR is 7.39% on Tier 2 versus 8.25% on the fund. The lesson is that Tier 2’s tax disadvantage shrinks at lower slabs and shorter horizons, but it rarely disappears for a private investor.
Six Things to Know Before Using NPS Tier 2
These six tips capture the practical framework for deciding whether NPS Tier 2 belongs in your portfolio, based on your employer type, your tax slab, and your specific goals.
Private investors: weigh cost against tax
Tier 2’s ultra-low expense ratio is real, but for equity exposure the slab-rate taxation usually costs more than the expense saving. A direct equity mutual fund with 12.5% LTCG typically wins after tax for a private investor in the 20% or 30% bracket.
Government employees: Tier 2 is compelling
If you are a Central Government employee, the Section 80C deduction on Tier 2 (with a 3-year lock-in) usually makes it the better choice. The upfront tax saving outweighs the slab tax on gains, especially at a high slab.
Tier 2 shines against debt, not equity
Since April 2023, debt mutual funds are also taxed at slab rate with no indexation. Against a debt fund, Tier 2’s rock-bottom cost makes it genuinely competitive. Its tax disadvantage only bites when compared to equity funds with their LTCG concession.
Use Tier 2 for its liquidity, not tax
Tier 2’s real strength for private investors is total liquidity: you can withdraw any business day with no exit load or lock-in. If you value a low-cost, liquid parking spot and accept slab-rate tax, it has a place, just not as your primary equity growth vehicle.
You need a Tier 1 account first
Tier 2 cannot be opened on its own. You must have an active Tier 1 retirement account. If you only want the flexible savings feature and have no interest in the locked-in retirement account, the prerequisite is a real friction to consider.
Keep clean records for tax filing
Because Tier 2 gains are taxed as ordinary income at withdrawal with no TDS deducted by the fund, you are responsible for declaring the gain in your ITR and paying the tax. Track your contributions and withdrawals carefully so you can compute the taxable gain correctly.
NPS Tier 2 at a Glance
This quick-reference table gathers the key facts and the bottom-line verdict for each investor type without needing to re-read the full discussion above.
| Question | Answer |
|---|---|
| Lock-in for private investors | None, fully liquid |
| Expense ratio | 0.01 to 0.09% |
| Tax on gains | Slab rate, no LTCG, no indexation |
| 80C on contributions | Only Central Govt (3-year lock) |
| Needs Tier 1 account? | Yes, mandatory |
| Best against | Debt funds (also slab-taxed) |
| Weakest against | Equity funds (12.5% LTCG) |
| Private investor verdict | Equity MF usually wins after tax |
| Govt employee verdict | Tier 2 wins on 80C |
NPS Tier 2 Calculator: Frequently Asked Questions
How are NPS Tier 2 gains taxed?
NPS Tier 2 gains are taxed at your applicable income tax slab rate as ordinary income in the year of withdrawal. When you redeem from Tier 2, the gain (the difference between what you withdraw and what you contributed) is added to your total income and taxed at your marginal slab, which for a high earner is 30% plus surcharge and cess.
Critically, there is no indexation benefit and no concessional long-term capital gains rate. This is very different from an equity mutual fund, where long-term gains are taxed at just 12.5% with a Rs 1.25 lakh annual exemption. For a private-sector investor in a high slab, this slab-rate taxation is the single biggest drawback of Tier 2 and often makes an equity mutual fund the better after-tax choice despite its higher expense ratio.
Is NPS Tier 2 better than a mutual fund?
It depends on your employer type, tax slab, and whether you compare against equity or debt funds. For a private-sector investor comparing Tier 2 to an equity mutual fund, the mutual fund usually wins after tax, because it enjoys the 12.5% LTCG rate while Tier 2 gains are taxed at your full slab. Tier 2’s ultra-low expense ratio helps but rarely overcomes the tax gap for a 20% or 30% slab investor.
Against a debt mutual fund, however, Tier 2 is genuinely competitive, because debt funds are also taxed at slab rate since April 2023, so Tier 2’s lower cost gives it an edge. For Central Government employees, Tier 2 becomes attractive because of the Section 80C deduction. Use the calculator above to see the exact after-tax comparison for your own numbers.
Does NPS Tier 2 have a lock-in period?
For private-sector and self-employed investors, NPS Tier 2 has no lock-in at all. You can withdraw your money on any business day without exit loads or penalties, which makes it one of the most liquid investment products available. This liquidity is Tier 2’s genuine strength for private investors.
The exception is Central Government employees who opt for the Section 80C tax benefit: they must accept a 3-year lock-in on the notified default scheme in exchange for the deduction. So the lock-in status depends on whether you are claiming the tax benefit. For most private investors who use Tier 2 purely for its flexibility, there is no lock-in, and this is often the main reason they choose it over other instruments.
Can private-sector employees claim 80C on NPS Tier 2?
No. Private-sector employees and self-employed individuals cannot claim any tax deduction on NPS Tier 2 contributions. There is no Section 80C, no Section 80CCD(1), and no Section 80CCD(1B) benefit for Tier 2 for these investors.
Contributions are made from post-tax income with no immediate tax relief, and the gains are taxed at slab rate on withdrawal. The Section 80C deduction on Tier 2 is available only to Central Government employees who invest through the notified default scheme and accept a 3-year lock-in. This is a frequent point of confusion, because Tier 1 does offer generous deductions to all subscribers under 80CCD. Tier 2 does not extend those benefits to private investors, which is central to understanding whether it suits your situation.
What is the expense ratio of NPS Tier 2?
NPS Tier 2 has one of the lowest expense ratios of any managed investment product in India, typically ranging from 0.01% to 0.09% per year depending on the fund manager and scheme. This is a fraction of what even a direct equity mutual fund charges, which is usually 0.3% to 1.0%, and far below regular mutual fund plans at 1% to 2%.
This ultra-low cost is Tier 2’s headline attraction and the reason many investors are drawn to it. Over a long horizon, a lower expense ratio compounds into a meaningful difference in corpus, all else being equal. However, as this calculator demonstrates, the expense ratio advantage is usually outweighed by Tier 2’s less favourable tax treatment when compared against an equity mutual fund, so low cost alone does not make it the best choice for a private investor.
Do I need a Tier 1 account to open Tier 2?
Yes. An active NPS Tier 1 account is a mandatory prerequisite for opening a Tier 2 account. Tier 2 cannot exist independently; it is designed as a voluntary savings add-on to the primary Tier 1 retirement account.
If you do not already have a Tier 1 account, you must open one first, which involves committing to the Tier 1 rules including its lock-in until age 60 and the mandatory annuity purchase at retirement. For investors who are interested only in Tier 2’s flexible savings feature and have no wish to lock money into Tier 1 until 60, this prerequisite is a real consideration. That said, opening a Tier 1 account does not obligate you to contribute large amounts to it; you can maintain it with the minimum contribution while using Tier 2 for flexible investing.
How is NPS Tier 2 different from Tier 1?
Tier 1 and Tier 2 serve fundamentally different purposes. Tier 1 is the core retirement account: it is locked until age 60, offers generous tax deductions under Sections 80CCD(1), 80CCD(1B), and 80CCD(2), and requires you to use at least 40% of the corpus to buy an annuity at retirement (with recent rules allowing up to 80% lump sum in some cases).
Tier 2 is a voluntary savings account with no lock-in for private investors, no tax deduction (except the Central Government 80C exception), and full flexibility to withdraw anytime. In one line: Tier 1 is locked and tax-advantaged for retirement, while Tier 2 is liquid and tax-neutral for general savings. Most investors should treat Tier 1 as their primary NPS vehicle for the tax benefits and evaluate Tier 2 separately on its cost-versus-tax merits against other liquid options.
Is NPS Tier 2 taxed on withdrawal even for the principal?
No, only the gains are taxed, not the principal. When you withdraw from NPS Tier 2, the amount representing your original contributions is not taxed again, because it was already made from post-tax income. Only the gains, which is the growth on your investment, are added to your income and taxed at your slab rate.
This is the standard treatment for a post-tax investment: you are taxed on what you earned, not on what you put in. The practical challenge is computing the taxable gain correctly, especially for a SIP with many contributions at different times and partial withdrawals. Because the fund does not deduct TDS on Tier 2 withdrawals, you are responsible for calculating and declaring the gain in your income tax return, so keeping careful records of contributions and withdrawals is important.
What happens to NPS Tier 2 if the subscriber dies?
If the NPS subscriber dies, the entire accumulated corpus in both Tier 1 and Tier 2 is paid to the registered nominee or legal heir, and this payout is completely exempt from income tax. This is a favourable feature: unlike a normal withdrawal where gains are taxed at slab rate, the death benefit passes to the nominee tax-free.
For estate-planning purposes, this means NPS balances are transferred efficiently to heirs. It is important to keep your nomination details up to date in your NPS account so the corpus reaches the intended beneficiary without dispute. The tax-free treatment on death applies to the full corpus including all gains, which is a meaningful benefit that distinguishes NPS from some other investment products where the tax liability may carry over to the heirs.
Can I switch fund managers or asset allocation in Tier 2?
Yes. NPS Tier 2 gives you the same flexibility as Tier 1 to choose and switch among the fund managers and to adjust your asset allocation across equity, corporate debt, government bonds, and alternative assets. There are currently several PFRDA-registered pension fund managers including SBI, UTI, LIC, HDFC, ICICI, Kotak, and others, and you can move between them subject to the scheme rules.
You can also choose between active choice, where you set your own allocation, and auto choice, where a lifecycle fund automatically de-risks as you age. This flexibility, combined with the very low expense ratio, is part of Tier 2’s appeal. Switching between fund managers or rebalancing within NPS is not treated as a taxable withdrawal, so you can adjust your portfolio without triggering a tax event, which is an advantage over selling and rebuying mutual funds in a taxable account.
Is NPS Tier 2 a good alternative to a savings account or liquid fund?
Tier 2 can be a reasonable option for parking money you want to keep liquid but invested, particularly if you use a low-risk asset allocation. Because it has no lock-in for private investors and a very low expense ratio, it functions somewhat like a liquid or ultra-short debt fund but at lower cost.
Against a debt mutual fund or liquid fund, which are also taxed at slab rate since April 2023, Tier 2’s lower expense ratio gives it a genuine edge. However, for a pure emergency fund you may prefer the instant access of a savings account or a sweep-in fixed deposit, since Tier 2 withdrawals, while allowed any business day, still take a day or two to process. Tier 2 is best thought of as a low-cost, flexible investment account for money you want invested but accessible, rather than as an instant-access emergency reserve.
Does the new tax regime affect NPS Tier 2?
The new tax regime does not change the taxation of Tier 2 gains, which are taxed at slab rate under both regimes. What the new regime does affect is the Section 80C deduction available to Central Government employees on Tier 2: since the new regime disallows most deductions including 80C, a government employee who has opted for the new regime cannot claim the Tier 2 80C benefit.
This removes the main advantage that makes Tier 2 attractive for government employees, leaving them in a position similar to private investors where the equity mutual fund’s tax treatment is more favourable. So the regime choice matters most for government employees weighing Tier 2: under the old regime the 80C benefit makes Tier 2 compelling, while under the new regime that benefit vanishes and the calculus shifts toward equity mutual funds.
How does Tier 2 compare to ELSS for tax saving?
For a private investor, ELSS is far superior to Tier 2 for tax saving. ELSS (Equity Linked Savings Scheme) mutual funds offer a Section 80C deduction of up to Rs 1.5 lakh under the old regime, have a short 3-year lock-in, and their gains are taxed at the concessional 12.5% LTCG rate. Tier 2, by contrast, offers no 80C deduction to private investors and taxes gains at slab rate. So ELSS wins on both the deduction and the gains tax for a private investor.
The only case where Tier 2 competes on tax is for Central Government employees, who can claim 80C on Tier 2 with a 3-year lock, similar to ELSS. Even then, ELSS retains the LTCG advantage on gains. For most tax-saving purposes under the old regime, ELSS, PPF, and Tier 1 NPS are better vehicles than Tier 2. Our ELSS calculator can model the ELSS option in detail.
What returns can I expect from NPS Tier 2?
NPS Tier 2 returns depend entirely on your chosen asset allocation and fund manager, since Tier 2 invests in the same underlying assets as Tier 1. Equity-heavy allocations have historically delivered around 9% to 12% over long periods, with some single-year equity rallies producing much higher returns, while debt-oriented allocations return less but with lower volatility.
Top-performing NPS schemes have shown 3-year returns around 9% for balanced allocations. Because you control the equity-debt mix, your expected return is a function of how aggressive you choose to be. The key point for Tier 2 is that whatever gross return you earn, the after-tax return for a private investor is reduced by slab-rate taxation on the gains, which is why the post-tax CAGR shown by this calculator is more relevant than the headline gross return when comparing Tier 2 against alternatives.
Should I use Tier 2 or just invest more in Tier 1?
For retirement savings specifically, additional Tier 1 contributions are usually better than Tier 2 for the tax benefits, since Tier 1 offers deductions under 80CCD(1), the extra Rs 50,000 under 80CCD(1B), and employer contributions under 80CCD(2). But Tier 1 locks the money until 60 and forces an annuity purchase, so it is unsuitable for goals before retirement.
Tier 2 is the right tool when you want NPS’s low-cost fund management but need the money accessible before 60. The two serve different purposes: max out Tier 1 for the tax-advantaged retirement corpus, and use Tier 2 only for medium-term goals where you want low-cost investing with liquidity and accept the slab-rate tax. For a private investor, though, even that medium-term role is often better filled by an equity or debt mutual fund depending on the tax comparison, which this calculator helps you evaluate.
Can I move money from Tier 2 to Tier 1?
Yes, NPS allows a one-way transfer of funds from your Tier 2 account into your Tier 1 account. This can be useful if you decide you want to convert some of your flexible Tier 2 savings into locked-in retirement savings, for example to claim additional tax deductions available in Tier 1 or to commit more toward your retirement corpus. The transfer moves money from the liquid Tier 2 account into the retirement-locked Tier 1 account, after which it is subject to Tier 1’s rules including the lock-in until 60.
Note that you cannot transfer the other way, from Tier 1 to Tier 2, because that would defeat the purpose of Tier 1’s retirement lock-in. Before transferring, consider that money moved into Tier 1 loses the liquidity that made Tier 2 attractive in the first place, so only transfer amounts you are genuinely willing to lock away for retirement. This one-way flexibility is a useful feature for investors whose priorities shift over time toward retirement saving.
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Disclaimer and Editorial Transparency
This calculator compares NPS Tier 2 against an equity mutual fund on an after-tax basis, applying slab-rate taxation to Tier 2 gains (no indexation, no long-term capital gains concession) and 12.5% long-term capital gains tax above the Rs 1.25 lakh annual exemption to the equity fund.
It nets each vehicle’s expense ratio from the gross return and, for Central Government employees, adds the Section 80C deduction on Tier 2 contributions valued at the stated slab rate.
The calculator uses a constant gross return for illustration; actual NPS and mutual fund returns vary year to year and are not guaranteed. It does not model surcharge or cess (which would increase the effective slab tax for high earners, widening Tier 2’s disadvantage), does not model the equity fund’s short-term capital gains if sold within a year, and assumes the equity fund is held long enough to qualify for LTCG. The Central Government 80C benefit assumes the old tax regime and the notified default scheme with a 3-year lock-in; it is unavailable under the new regime. Tax rules for NPS Tier 2 are set under the Income-tax Act and administered by the PFRDA; verify current rules on the Income Tax Department and PFRDA portals. CalcWise.Finance provides this tool for educational purposes only and does not offer investment advice or manage funds.