🏦 What is NPS (National Pension System)?
The National Pension System (NPS) is a government-backed retirement savings scheme designed to provide financial security after retirement. It’s regulated by the PFRDA (Pension Fund Regulatory and Development Authority) and is available to all Indian citizens aged 18–70 years.
NPS helps you build a corpus for retirement while also giving you tax benefits and the flexibility to manage your investment.
🎯 Key Features of NPS
- 🧓 Builds Retirement Corpus: Invest regularly to accumulate a lump sum for retirement.
- 🔁 Flexible Investment Options: Choose between Auto and Active asset allocation.
- 📈 Market-Linked Returns: Earn returns from equity, corporate debt, and government securities.
- 💳 Portable Account: Use one NPS account even if you change your job or location.
- 💸 Low Fund Management Charges: One of the lowest-cost retirement plans in India.
📊 Tax Benefits Under NPS
- ✅ Up to ₹1.5 lakh under Section 80C
- ✅ Additional ₹50,000 under Section 80CCD(1B) (exclusive NPS benefit)
- ✅ Employer’s contribution (up to 10% of salary) under Section 80CCD(2) (for salaried individuals)
⚠️ Total tax deduction of up to ₹2 lakh per year!
🧮 How NPS Works
- Open an NPS account (Tier I mandatory, Tier II optional)
- Contribute regularly (as low as ₹500 at a time)
- Choose your investment mix (equity, corporate debt, govt bonds)
- At retirement (60 years):
- Withdraw up to 60% tax-free
- Use 40% to purchase an annuity for monthly pension
📝 Who Should Invest in NPS?
- Working professionals planning for retirement
- Salaried individuals wanting tax savings
- Self-employed individuals looking for long-term growth