National Pension System

USP OF NPS: Dual Exclusive Tax Benefit over and above Investment limit of Rs. 1.5 lacs u/s 80C:

Tier 1 Account:

> Pension Account for retirement savings.
> Mandatory to open to join NPS.
> Withdrawal from this account is conditional.
> Tax deduction can be claimed on investment.

Tier 2 Account:

 It’s normal account with no limit on withdrawal & no tax benefits.

Contribution routed through Employee directly
Employee can, additionally, contribute up to Rs.50,000 towards NPS which will be exempt from taxable income u/s 80CCD (1B) of Income Tax Act, 1961

Contribution routed through Employer
To the extent of 10% of Salary (Basic + Dearness Allowance) is exempt from taxable income of the employee u/s 80 CCD (2) of Income Tax Act 1961