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National Pension System (NPS)

Government-sponsored retirement savings scheme offering tax benefits, market-linked returns, and flexible investment options.

Tax BenefitsLow CostFlexible

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 financial advisors will help you select the right NPS strategy based on your retirement goals and risk tolerance.