Power Calculators

🎯 Commutation of Pension

Calculate the lump-sum amount receivable by commuting a portion of your monthly pension.

By the Power Calculators team Updated

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Fill in the details and click Calculate to see your results.

This calculator is independent and unofficial — not affiliated with, endorsed by, or a representative of the Government of India or any government department. Figures are estimates for informational purposes; verify official figures before making decisions.

Formula at a glance

Commutation of Pension formula: Lump sum = Pension × (Commuted % ÷ 100) × Commutation factor × 12; Reduced pension = Pension − (Pension × Commuted % ÷ 100)
How the commutation of pension works: Lump sum = Pension × (Commuted % ÷ 100) × Commutation factor × 12

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  • Financial CalculatorEMI, SIP, PPF, NPS, post office schemes and government-employee calculatorsGet it on Google Play
  • Govt Employee CalculatorSalary, DA, pension and income tax for government employeesGet it on Google Play

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📘 About the Commutation of Pension Calculator

Commutation lets a pensioner convert up to 40% of the pension into a lump sum paid at retirement. The pension is reduced by the commuted portion, and is restored in full after the recovery period.

The lump sum depends on the commutation factor for your age next birthday, which you can choose here.

🧮 Formula

Commuted lump sum
Lump sum = Pension × (Commuted % ÷ 100) × Commutation factor × 12
Reduced pension
Reduced pension = Pension − (Pension × Commuted % ÷ 100)

Where

  • Commutation factor = the value in the government's table for your age next birthday
  • Commuted % = the share of pension commuted, up to 40%

✏️ Worked examples

₹40,000 pension, 40% commuted at 60

You enter
Monthly Basic Pension₹40,000
Commuted Percentage40%
Age Next Birthday (61 if retiring at 60)61 years (factor 8.194)
You get
Commuted lump sum₹15,73,248
Reduced monthly pension (basic)₹24,000
Monthly pension given up₹16,000
Full pension restored after15 years from the date of commutation
Break-even (lump sum ÷ pension given up)8.2 years, ignoring DR
Commutation factor used8.194

Lump sum ₹15,73,248; pension left ₹24,000.

₹25,000 pension, 40% commuted

You enter
Monthly Basic Pension₹25,000
Commuted Percentage40%
Age Next Birthday (61 if retiring at 60)61 years (factor 8.194)
You get
Commuted lump sum₹9,83,280
Reduced monthly pension (basic)₹15,000
Monthly pension given up₹10,000
Full pension restored after15 years from the date of commutation
Break-even (lump sum ÷ pension given up)8.2 years, ignoring DR
Commutation factor used8.194

Lump sum ₹9,83,280.

🧭 How to use this calculator

What you enter

  • Monthly Basic Pension (₹)
  • Commuted Percentage
  • Age Next Birthday (61 if retiring at 60)

What you get

  • Commuted Lump Sum
  • Reduced Monthly Pension

❓ Frequently asked questions

How much pension can be commuted?

Up to 40% of the basic pension.

When is the full pension restored?

After the commuted portion has been recovered, usually after 15 years.

Is the lump sum taxable?

Commuted pension is exempt from tax for government employees.

What is the commutation factor at age 60?

8.194 — age next birthday 61, which applies to someone retiring at 60.

How is commutation of pension calculated?

Commuted pension × commutation factor × 12. For ₹16,000 commuted at factor 8.194: 16,000 × 8.194 × 12 = ₹15,73,248.