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Guide

NPS: National Pension System

Tier I vs Tier II, fund manager choice and the extra ₹50,000 deduction.

Updated 17 August 2026

Your numbers

₹500₹10,000₹5 L
1830 years65
510%15
4040%100

Minimum 40% by law.

46%10
Corpus at 60
₹2,27,93,253
  • Lump sum60%
  • Annuity40%
Total invested
₹36,00,000
Tax-free lump sum (60%)
₹1,36,75,952
Locked into annuity
₹91,17,301
Monthly pension
₹45,587

What this means.NPS gives an extra ₹50,000 deduction under 80CCD(1B) over and above 80C. The catch: at least 40% must buy an annuity, annuity income is fully taxable, and current annuity rates of about 6% are poor value versus an SWP.

Questions

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Related reading

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