Project your National Pension System (NPS) corpus at retirement, the 60% tax-free lump-sum withdrawal, and your monthly pension from the annuity portion. Get an extra ₹50,000 deduction under Section 80CCD(1B) beyond your 80C limit.
NPS is the only retirement scheme that gives you a tax deduction beyond the ₹1.5 lakh 80C limit:
Available only under the Old Tax Regime.
Monthly contributions grow in a market-linked portfolio. At age 60, withdraw 60% lump-sum tax-free; min 40% must buy annuity for monthly pension.
Up to ₹1.5L under 80CCD(1) within 80C; additional ₹50K under 80CCD(1B); employer's contribution under 80CCD(2). 60% maturity lump-sum is tax-free; annuity income taxed at slab rate.
Min ₹500 per contribution, ₹1,000/year for Tier 1. No upper limit. Tier 2 is flexible but no tax benefit.
Equity ~12-14%, Corporate Bonds ~9-10%, G-Sec ~8-9% historically. Use 10% blended for planning.
Partial withdrawal after 3 years (up to 25% of own contribution, max 3 times). Full exit before 60: only 20% lump-sum, 80% mandatory annuity. Plan NPS as long-term.
NPS = additional 50K deduction + market returns + forced pension. PPF = safe 7.1% tax-free, 15-year. ELSS = highest equity returns, 3-year lock-in. Combine all three.
NPS, EPF, PPF, mutual funds — choosing the right mix can mean lakhs more at retirement. Get a CA-led retirement plan.
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