National Pension Scheme – Features, Latest Tax Benefits & Types Of Accounts

By BankBazaar.com | July 21, 2019

Got questions on the National Pension Scheme (NPS)? This video answers all your questions and more. Watch it now!

The National Pension Scheme can be a very good option if you are looking for a secure source of income after retirement. If you have questions on retirement planning, then you must watch the above video.

What tax benefits does NPS offer? NPS allows you to claim a tax deduction of up to Rs. 50,000 under section 80CCD. This is over and above the Rs. 1.5 lakh limit under section 80C. Also, on maturity, you can withdraw up to 60% of the corpus tax-free. The remaining 40% has to be used to buy a pension plan.

What are the different types of National Pension Scheme Accounts? You can choose between two types of accounts – tier 1 and tier 2 If you have a tier 1 account, then there are limits on how much you can withdraw before retirement. Even after you retire, you cannot withdraw the entire amount. Tier 2 accounts do not have any withdrawal restrictions. However, this type of account does not have any tax benefits.

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