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Government Backed Pension Scheme

National Pension System (NPS)

Secure your retirement with India's most popular pension scheme. Enjoy market-linked returns, tax benefits up to ₹2 lakh, and flexible investment options.

Why Choose NPS?

Government Regulated

Regulated by PFRDA, ensuring safety and transparency

Market-Linked Returns

Potential for higher returns through equity exposure

Tax Benefits

Save up to ₹2 lakh in taxes annually

Portable

One account for lifetime, across jobs and locations

NPS Account Types

NPS Tier I Account
Primary retirement account with tax benefits and withdrawal restrictions

Min. Investment

₹500

Tax Benefit

Up to ₹2 Lakh

Withdrawal

At retirement (60 years)

Key Features:

Mandatory for government employees

Tax deduction under Section 80CCD(1) & 80CCD(1B)

60% lump sum withdrawal at maturity

40% annuity purchase mandatory

Partial withdrawal allowed after 3 years

NPS Tier II Account
Voluntary savings account with complete liquidity and flexibility

Min. Investment

₹1,000

Tax Benefit

Limited (for govt employees)

Withdrawal

Anytime without restrictions

Key Features:

Requires active Tier I account

No lock-in period

Flexible withdrawals anytime

Tax benefits only for government employees

Ideal for short to medium-term goals

Investment Options

Choose from four asset classes based on your risk appetite and retirement goals

Equity (E)
High Risk
High potential

Max Allocation

Up to 75%

Invests in equity and equity-related instruments

Corporate Bonds (C)
Medium Risk
Moderate

Max Allocation

Up to 100%

Invests in fixed income instruments other than government securities

Government Securities (G)
Low Risk
Stable

Max Allocation

Up to 100%

Invests in government bonds and securities

Alternative Investment (A)
Medium-High Risk
Variable

Max Allocation

Up to 5%

Invests in REITs, InvITs, and other alternative assets

Tax Benefits

Save up to ₹2 lakh in taxes every year with NPS contributions

Section 80CCD(1)
Up to ₹1.5 Lakh

Deduction for employee contribution (within overall ₹1.5L limit of Section 80C)

Section 80CCD(1B)
Additional ₹50,000

Extra deduction over and above Section 80C limit

Section 80CCD(2)
Up to 10% of salary

Employer contribution (14% for government employees)

Maximum Tax Savings

By contributing ₹2 lakh annually (₹1.5L under 80CCD(1) + ₹50K under 80CCD(1B)), you can save up to ₹62,400 in taxes (at 30% tax bracket + cess).

How to Open NPS Account

1

Choose Account Type

Select between Tier I (retirement) or Tier II (voluntary savings) account

2

Complete KYC

Submit Aadhaar, PAN card, and bank account details for verification

3

Select Investment Option

Choose between Active Choice (select your own asset allocation) or Auto Choice (lifecycle-based)

4

Make Initial Contribution

Minimum ₹500 for Tier I and ₹1,000 for Tier II account

5

Receive PRAN

Get your Permanent Retirement Account Number (PRAN) to start investing

Frequently Asked Questions

Who can open an NPS account?

Any Indian citizen between 18-70 years can open an NPS account. NRIs are also eligible to open and contribute to NPS.

What is the minimum contribution required?

For Tier I account, minimum ₹500 per contribution with at least ₹1,000 annually. For Tier II, minimum ₹1,000 initially and ₹250 per subsequent contribution.

Can I withdraw from NPS before retirement?

Partial withdrawals (up to 25% of contributions) are allowed from Tier I after 3 years for specific purposes like children's education, marriage, or medical treatment. Tier II allows anytime withdrawal.

What happens at retirement (60 years)?

At retirement, you can withdraw 60% as lump sum (tax-free) and must use 40% to purchase an annuity for regular pension income.

Is NPS better than PPF or EPF?

NPS offers higher potential returns through equity exposure and additional tax benefits (₹50K under 80CCD(1B)). However, it has mandatory annuity purchase and market-linked returns, unlike guaranteed returns in PPF/EPF.

Can I have both Tier I and Tier II accounts?

Yes, but you must have an active Tier I account to open a Tier II account. Both can be managed under the same PRAN.

Ready to Secure Your Retirement?

Start your NPS journey today and build a substantial retirement corpus with tax benefits

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