NPS Taxation & Benefits
Maximize Your Tax Savings While Planning Your Retirement
The Power of Triple Tax Benefits
NPS offers one of the most efficient tax-saving structures available in India today.
Sec 80C / 80CCD(1)
Standard Deduction
Contributions up to 10% of salary (for employees) or 20% of gross income (for self-employed) are deductible within the ₹1.5 Lakh limit of Section 80C.
Sec 80CCD(1B)
Exclusive Benefit
Enjoy an additional deduction of ₹50,000 specifically for NPS contributions. This is over and above the ₹1.5 Lakh limit of Section 80C.
Sec 80CCD(2)
Corporate Advantage
Employers can contribute up to 10% of your Basic + DA. This amount is **tax-free** for the employee and deductible for the employer.
How Much Can You Save?
Section 80C
₹1,50,000
+
NPS Exclusive
₹50,000
=
Total Deduction
₹2,00,000
*Additional employer contribution benefits under 80CCD(2) are extra for corporate employees.
Taxation on Withdrawal
At Age 60 (Maturity)
- 60% Lump Sum: Completely TAX-FREE.
- 40% Annuity: Amount used to purchase annuity is tax-exempt. (Pension income is taxable).
Partial Withdrawals
- 25% of your own contributions can be withdrawn tax-free for specific purposes after 3 years.