The National Pension System is the only retirement product in India that combines disciplined long-term saving with an extra ₹50,000 tax deduction (Section 80CCD(1B)) over and above the ₹1.5 lakh 80C limit. For salaried employees with employer NPS contribution under 80CCD(2), the deduction can stretch even further - and uniquely, this employer-share deduction is the only NPS benefit that survives in the new tax regime.
The guides below cover the three decisions every NPS subscriber faces: how to choose between Auto and Active investment mode (and which fund manager), how to stack the three tax deductions to maximise savings, and what the withdrawal rules look like at retirement, on premature exit, and in case of death. The FAQ at the bottom answers the most common questions on tax, withdrawal, and how NPS compares to PPF.
All NPS Guides
NPS Fund Choice Guide India 2026 | Auto vs Active Mode
Auto vs Active mode, asset classes E/G/C/A, age-based equity tapering, and comparing SBI, HDFC, ICICI, LIC, UTI and Kotak fund managers.
Read Guide →NPS Tax Benefits India 2026 | 80CCD(1), (1B) and (2) Guide
80CCD(1) up to ₹1.5L, 80CCD(1B) extra ₹50,000, and 80CCD(2) employer contribution. Save up to ₹78,000 in tax in FY 2025-26.
Read Guide →NPS Withdrawal Rules India 2026 | Exit & Premature Rules
60% tax-free at 60, 40% annuity mandatory. Premature exit: 20%/80% split. Partial withdrawal conditions and death benefit explained.
Read Guide →Calculate Your NPS
Use our free NPS calculator to plan your investments with accurate projections.
Open NPS Calculator →Frequently Asked Questions
What is the tax benefit of investing in NPS?
NPS offers three tax breaks: ₹1.5 lakh under Section 80C (Tier-I contributions, within overall 80C limit), an additional ₹50,000 under Section 80CCD(1B) exclusively for NPS, and employer contribution up to 14% of basic+DA for government and 10% for private sector under 80CCD(2) - over and above 80C. Total potential deduction: ₹2 lakh + employer share.
When can I withdraw from NPS?
At age 60: withdraw up to 60% as lump sum (tax-free); the balance 40% must buy an annuity. Partial withdrawals allowed from Tier-I after 3 years for specific purposes (child education, marriage, home purchase, medical emergency) - up to 25% of contributions. Tier-II is fully withdrawable anytime without tax benefits.
How does NPS compare with PPF for retirement?
NPS offers higher potential returns (9–12% CAGR depending on asset mix), equity exposure up to 75%, and an extra ₹50,000 deduction beyond PPF's ₹1.5 lakh limit. PPF is fully EEE (tax-free on contribution, interest, and withdrawal) but capped at 7.1% and ₹1.5 lakh/year. A blended approach - PPF for safety plus NPS for growth - suits most investors.
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