NPS (National Pension System)

NPS (National Pension System)

NPS (National Pension System) is a market-linked voluntary contribution scheme that helps you save for your retirement. The scheme is simple, systematic, portable and flexible and is one of the most efficient ways of boosting your retirement income.

Features of NPS

Tiered Accounts:

• Tier I: Primary pension account with tax benefits and restrictions on withdrawal.
• Tier II: Optional savings account with flexible withdrawals.

Market-Linked Returns: Funds invested in equities, government bonds, etc.
Flexible Contributions: Choose how much and how often to invest.
Professional Fund Management: Managed by licensed pension fund managers.
Portability: Remains active across jobs and locations in India.

Benefits of NPS

Retirement Security: Builds a stable corpus for post-retirement life.

Tax Benefits:

• Up to ₹1.5 lakh under Section 80C.
• Additional ₹50,000 under Section 80CCD(1B).

Annuity Option: On retirement, part of the corpus is used to buy an annuity for regular income.
Partial Withdrawals: Allowed for specific purposes like education, illness, etc.