How NPS Works
The National Pension Scheme (NPS) is a government-backed retirement savings scheme. You contribute regularly until age 60, your money grows in market-linked funds, and at retirement you receive a lump sum plus a lifelong monthly pension.
Corpus, Lump Sum and Pension
- Your monthly contributions compound until 60 to build a corpus.
- At 60 you can withdraw up to 60% as a tax-free lump sum.
- At least 40% must buy an annuity that pays a monthly pension.
- The pension depends on the annuity amount and annuity rate.
NPS Tax Benefits
NPS offers deductions under Section 80CCD(1) within the ₹1.5 lakh 80C limit, plus an exclusive extra ₹50,000 under Section 80CCD(1B) — making it one of the most tax-efficient retirement tools.
Frequently Asked Questions
Who can open an NPS account?
Any Indian citizen aged 18–70 can join NPS. It's mandatory for most central government employees and open to everyone else voluntarily.
Can I choose how my money is invested?
Yes. You can pick your asset mix (equity, corporate bonds, government securities) actively, or let it auto-adjust with age.