NPS
The National Pension System (NPS) is a government-backed retirement savings scheme in India designed to provide financial security post-retirement. It allows individuals to contribute regularly to a pension account and build a corpus over time.
Key Features of NPS:
- Voluntary Participation – Open to all Indian citizens, including employees from the public, private, and unorganized sectors.
- Investment Options – Funds are invested in equities, corporate bonds, and government securities based on the subscriber’s choice.
- Tax Benefits – Contributions qualify for tax deductions under Section 80C and 80CCD of the Income Tax Act.
- Annuity Purchase – At retirement, a portion of the corpus is used to buy an annuity, ensuring a steady pension income.
- Portability – The account remains active regardless of job changes or location shifts.
NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and offers a structured approach to retirement planning.