Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
National Pension System is a voluntary defined-contribution retirement scheme regulated by PFRDA, offering market-linked returns and tax benefits.
NPS is a retirement account where your money is invested in mix of equity and debt — builds pension corpus till age 60 with tax breaks.
Tier I mandatory with lock-in till 60 (partial exceptions). Active or auto choice among E, C, G, A asset classes. Additional ₹50,000 deduction under 80CCD(1B). At maturity, 60% lump sum withdrawable (tax-exempt), 40% must buy annuity (taxable pension).
Age 30 contributing ₹50,000 yearly till 60 with 10% return may build ₹90 lakh+ corpus. ₹54 lakh lump sum plus ₹36 lakh annuity purchase at retirement.
NPS offers extra 80CCD(1B) deduction and low costs but mandatory annuity and equity cap. MF offers flexibility without forced pension product.
Partial withdrawal up to 25% for specified reasons after 3 years. Premature exit allowed with restrictions on lump sum and annuity split.
Tier I is retirement locked with tax benefits. Tier II is voluntary savings without tax deduction, withdrawable anytime.