New Pension Scheme (NPS)

The National Pension System (NPS) was launched on 1 January 2004 with the objective of providing retirement income to all citizens. It is a voluntary, defined contribution retirement savings scheme designed to enable the systematic savings of individuals during their working life.

The NPS scheme aims to provide old-age income security to all Indian citizens, particularly targeting the workforce in the unorganized sector. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

Eligibility:

Open to all citizens of India aged between 18 and 65.
Available to both salaried and self-employed individuals.

Account Types:

Tier I Account: This is the primary pension account with restrictions on withdrawals. It is mandatory and offers tax benefits.
Tier II Account: This is a voluntary savings account without withdrawal restrictions, primarily used for investment purposes. It doesn't offer additional tax benefits like the Tier I account.

Tax Benefits:

Contributions up to INR 1.5 lakh are eligible for tax deduction under Section 80C.
Additional deduction of up to INR 50,000 under Section 80CCD(1B).
Employer contributions up to 10% of salary (basic + DA) are deductible under Section 80CCD(2).

To calculate the maturity amount using the NPS Calculator, click here