National Pension System (NPS)
Government-sponsored retirement savings scheme offering tax benefits, market-linked returns, and flexible investment options.
Understanding NPS
The National Pension System (NPS) is a government-sponsored retirement savings scheme regulated by PFRDA, offering market-linked returns with tax benefits.
- Tax benefits up to ₹2 lakh
- Market-linked returns
- Flexible investment options
Account Types
Tier I Account
Primary retirement account with tax benefits and withdrawal restrictions
Key Features:
- Tax benefits under Section 80CCD
- Minimum annual contribution: ₹1,000
- Partial withdrawals allowed (up to 25% after 3 years)
- Mandatory annuity purchase at retirement
Ideal For:
Long-term retirement savings
Tier II Account
Voluntary savings account offering liquidity without tax benefits
Key Features:
- No tax benefits on contributions
- No minimum balance requirement
- Flexible withdrawals anytime
- Same investment options as Tier I
Ideal For:
Short-term financial needs
Investment Options
Active Choice
Customize your asset allocation across different asset classes
Key Features:
- Equity (E): Up to 75% (below 50 years)
- Corporate Bonds (C): Up to 100%
- Government Securities (G): Up to 100%
- Alternative Assets (A): Up to 5%
Ideal For:
Investors who want control
Auto Choice
Automatic asset allocation based on your age
Key Features:
- Aggressive (up to 35 years): 75% Equity
- Moderate (36-45 years): Gradual reduction
- Conservative (46+ years): 15% Equity at 55
- Automatic rebalancing
Ideal For:
Hands-off investors
Tax Benefits
Section 80CCD(1)
Deduction up to ₹1.5 lakh per year under overall Section 80C limit
Section 80CCD(1B)
Additional deduction of ₹50,000 exclusive of 80C limit
Section 80CCD(2)
Employer contribution up to 10% of salary (Basic + DA) is tax-free
Withdrawal Rules
Partial Withdrawal
Allowed after 3 years of account opening
- Maximum 25% of contributions (not corpus)
- Allowed for specific purposes: higher education, marriage, medical emergency, home purchase
- Maximum 3 withdrawals during entire tenure
Exit Rules
Options available at different stages:
- Before 60: 80% annuity purchase mandatory
- At 60: 40% annuity purchase mandatory
- After 60: Can defer withdrawal up to age 70
- Death: 100% corpus to nominee
Start Your NPS Journey Today
Our agent will help you select the right NPS strategy based on your retirement goals and risk tolerance.