A disciplined retirement account
The National Pension System (NPS) is a voluntary, defined-contribution retirement scheme regulated by PFRDA. You contribute during your working years; at 60, part of the corpus can be withdrawn and the rest is used to buy an annuity that pays a pension.
Key benefits
- Extra deduction of up to ₹50,000 under Section 80CCD(1B), over and above 80C (old regime).
- Employer contributions can be tax-efficient under both regimes, within limits.
- Very low fund-management costs.
- Choice of equity, corporate bond and government securities allocation.
Points to consider
NPS money is largely locked until 60, and a portion must be used to buy an annuity. It works best as one part of a broader retirement plan alongside mutual funds and EPF.
