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 At maturity, 60% can be withdrawn and 40% must be used to buy an annuity for monthly pension.

What are the tax benefits of NPS?

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.

What is the expected return on NPS?

NPS returns depend on the fund type (equity, corporate bonds, government securities). Historically, equity-heavy NPS funds have returned 10-12% p.a. over long periods.

NPS Calculator - National Pension Scheme Retirement Corpus

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About NPS

NPS (National Pension Scheme) is a voluntary retirement savings scheme regulated by PFRDA. It offers tax benefits under Section 80CCD(1B) — additional ₹50,000 deduction over 80C.

Frequently Asked Questions

What is the lock-in period for NPS?

NPS has lock-in until age 60. Partial withdrawal (up to 25%) is allowed after 3 years for specific emergencies.

How much can I withdraw at maturity?

At 60, you can withdraw up to 60% of the corpus tax-free. The remaining 40% must be used to purchase an annuity for monthly pension.

Is NPS better than EPF?

NPS offers higher return potential through equity exposure and additional ₹50,000 tax deduction. EPF has guaranteed returns. Use both for diversified retirement planning.

✅ Do's and ❌ Don'ts

✅ Do's

✅ Do maximize contribution to claim ₹50,000 80CCD(1B) deduction.
✅ Do choose equity-heavy allocation when young for higher growth.
✅ Do start NPS early — compounding works best over long periods.
✅ Do use NPS along with EPF and PPF for diversified retirement corpus.

❌ Don'ts

❌ Don't forget that 40% must be used for annuity purchase.
❌ Don't ignore fund performance — review annually and switch if needed.
❌ Don't assume NPS returns are guaranteed — they are market-linked.
❌ Don't withdraw before 60 — early withdrawal has tax implications.