What is NPS?
The National Pension System (NPS) is a cost-effective retirement investment framework regulated by the PFRDA. It allows investors to allocate funds across Equity (E), Corporate Bonds (C), and Government Securities (G).
Key Highlights
- Extra Tax Benefit: Additional tax deduction of up to ₹50,000 under Section 80CCD(1B) over and above the ₹1.5 Lakh 80C limit.
- Low Cost: Ultra-low fund management expense ratio (~0.09%).
- Maturity Structure: At age 60, up to 60% can be withdrawn tax-free as a lump sum, while 40% is mandatorily used to purchase an annuity for monthly pension payout.