Question 1

What is NPS?

Accepted Answer

NPS (National Pension Scheme) is a government-backed retirement savings scheme. Subscribers invest in equity and debt funds. At maturity, 60% can be withdrawn and 40% must be used to buy an annuity for monthly pension.

Question 2

What are the tax benefits of NPS?

Accepted Answer

Under Section 80CCD(1B), you can claim additional ₹50,000 tax deduction over and above 80C limit. Employer contribution under 80CCD(2) is also tax-free up to 14% of salary.