NPS: Key Features, Tax Benefits, and How to Open Your Retirement Account
NPS: Key Features, Tax Benefits, and How to Open Your Retirement Account
- •The National Pension System (NPS) is a PFRDA-regulated, voluntary, defined-contribution retirement savings scheme for long-term corpus building.
- •Initially for government employees in 2004, NPS opened to all citizens in 2009, becoming a tax-efficient retirement product with market-linked returns.
- •NPS offers Tier I (mandatory, tax benefits, withdrawal restrictions) and Tier II (voluntary, flexible withdrawals, no tax benefits for most) accounts.
- •Subscribers can choose active or auto investment options across equity, corporate debt, government securities, and alternative assets.
- •NPS provides significant tax benefits under Sections 80CCD(1), 80CCD(1B), and 80CCD(2), allowing deductions up to Rs 2 lakh annually.
