National Pension Scheme (NPS)
Plan your retirement with NPS — tax-efficient and government-backed.
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What is National Pension Scheme (NPS)?
The National Pension System (NPS) is a government-backed, PFRDA-regulated voluntary retirement savings scheme that helps individuals build a long-term pension corpus through regular contributions during their working years. NPS offers some of the most attractive tax benefits in the Indian tax code — contributions qualify for deduction under Section 80CCD(1) within the ₹1.5 lakh limit of Section 80C, and an additional exclusive deduction of ₹50,000 per year is available under Section 80CCD(1B), making the total potential tax benefit up to ₹2 lakh per year for NPS alone. For a professional across India's IT sector in the 30% tax bracket, this can translate to tax savings of ₹62,500 per year on just the additional ₹50,000 NPS contribution. NPS invests across equity (E), corporate bonds (C), and government securities (G) through PFRDA-registered Pension Fund Managers (SBI Pension, LIC Pension, HDFC Pension, ICICI Pru Pension, among others), offering market-linked growth with active or auto life-cycle based asset allocation. At Right Assets Management, we help individuals open their NPS account (Tier I and Tier II), select the right fund manager and asset allocation, and optimise their annual contributions for maximum tax efficiency.
Who Is This For?
- Salaried professionals across India who want to maximise tax savings beyond the ₹1.5 lakh Section 80C limit
- Self-employed individuals and freelancers who have no employer-provided EPF and want to build a retirement corpus
- Government employees (NPS is mandatory for central government employees joining after 2004) needing advisory on fund allocation
- Young professionals in their 20s and 30s wanting to start retirement saving early through a disciplined, tax-efficient vehicle
- Individuals in the 30% tax bracket who want to extract maximum benefit from the exclusive ₹50,000 80CCD(1B) deduction
- Pre-retirees wanting to understand NPS exit rules, annuity requirements, and lump-sum withdrawal tax treatment
How We Help — Step by Step
NPS Suitability Assessment
We assess whether NPS fits your retirement planning strategy considering your age, existing retirement savings (EPF, PPF), tax bracket, and retirement timeline.
Account Type Selection
We explain the difference between Tier I (mandatory, tax-advantaged, restricted withdrawals) and Tier II (voluntary, no tax benefit, fully flexible) accounts and recommend the right combination.
Pension Fund Manager Selection
We compare the performance track records of all PFRDA-registered Pension Fund Managers across equity, debt, and government security funds to select the best performing manager for your NPS account.
Asset Allocation Strategy
We recommend the right equity-debt split for your NPS account — Active choice for hands-on investors or Auto life-cycle choice for those who prefer systematic glide path management.
Account Opening Assistance
We guide you through the online (eNPS) or offline NPS account opening process, KYC, PRAN generation, and linking your bank account for contributions.
Annual Contribution Planning
We help you plan your annual NPS contributions to fully utilise the ₹50,000 Section 80CCD(1B) benefit and integrate NPS into your overall tax planning calendar.
Exit & Annuity Planning
As you approach retirement, we advise on NPS exit rules — at least 40% of corpus must be used to purchase an annuity plan, and up to 60% can be withdrawn as a tax-exempt lump sum — and help you select the right annuity provider.
Why Choose Right Assets for National Pension Scheme (NPS)?
- Claim an exclusive ₹50,000 tax deduction under Section 80CCD(1B) — over and above the ₹1.5 lakh Section 80C limit
- Build a market-linked retirement corpus with equity exposure through PFRDA-regulated fund managers
- Enjoy one of the lowest fund management charges in the Indian financial system (0.01–0.09% per annum)
- Choose from multiple asset classes — equity (up to 75%), corporate bonds, and government securities — in Active choice
- Benefit from automatic equity reduction as you age through the Auto life-cycle investment option
- Withdraw up to 60% of the NPS corpus tax-free at retirement (age 60), with only the annuity portion taxable
- Transfer your NPS account seamlessly across employers and cities — one PRAN for life regardless of job changes
Documents Required
Frequently Asked Questions
What is the additional tax benefit of NPS under Section 80CCD(1B)?
Over and above the ₹1.5 lakh deduction available under Section 80C (which includes NPS contributions under 80CCD(1)), you can claim an additional exclusive deduction of ₹50,000 per year for NPS contributions under Section 80CCD(1B). For someone in the 30% tax bracket, this means additional tax savings of ₹15,600 per year (₹50,000 × 30% + 4% cess).
Can I withdraw from NPS before retirement?
NPS Tier I allows partial withdrawals after 3 years of account opening, subject to conditions — up to 25% of your own contributions for specific purposes like children's education, marriage, home purchase, or medical treatment. Premature exit before age 60 requires at least 80% of the corpus to be annuitised. Tier II has no withdrawal restrictions.
How much of my NPS corpus is tax-free at retirement?
At age 60, you can withdraw up to 60% of your accumulated NPS corpus as a tax-free lump sum. The remaining 40% (minimum) must be used to purchase an annuity plan from an IRDAI-registered annuity provider, and the annuity income received is taxable as income in the year of receipt.
What is the difference between Active and Auto choice in NPS?
In Active choice, you decide the asset allocation between equity (E), corporate bonds (C), and government securities (G) — equity is capped at 75% up to age 50. In Auto life-cycle choice, the system automatically reduces your equity allocation and increases debt allocation as you age. Auto choice suits investors who prefer a set-and-forget approach; Active choice suits those who want to manage allocation actively.
Can NRIs invest in NPS?
Yes. Non-Resident Indians (NRIs) who are Indian citizens are eligible to invest in NPS. NRI contributions must be made from an NRE or NRO account. However, Overseas Citizens of India (OCI) and Persons of Indian Origin (PIO) who are not Indian citizens are not eligible to invest in NPS.
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