Govt. of India Schemes

National Pension System (NPS)

NPS (regulated by PFRDA) is a voluntary, market-linked, defined-contribution retirement system open to all Indian citizens aged 18–70. Tier I (restricted, retirement-purpose) and Tier II (flexible, limited tax benefits) accounts are identified by a portable PRAN. Investment spans equity (up to 75%), corporate bonds, government securities, and alternatives (up to 5%), via Active Choice (subscriber-set allocations) or Auto Choice (lifecycle funds). Tax benefits are the scheme's standout feature: 80CCD(1) within the 80C/80CCE ceiling of ₹1.5 lakh; an exclusive additional ₹50,000 deduction under 80CCD(1B) (old regime only); and employer-contribution deduction under 80CCD(2) (up to 10%/14% of salary) which is available even under the new tax regime. Key 2025 rule change: non-government subscribers can now withdraw up to 80% as a lump sum (tax-free), with only 20% mandatory annuity — liberalised from the earlier 60/40 rule; government employees remain at 40% lump sum / 60% annuity but can now opt for the new Unified Pension Scheme (UPS, effective April 2025) offering ~50% guaranteed pension for 25+ years of service. Full corpus withdrawal (no annuity required) is permitted if total corpus is ₹8 lakh or below. NPS Vatsalya (launched Sept 2024, formalised in Budget 2025) allows parents to open NPS accounts for minors, with equivalent 80CCD(1B) tax benefits. AUM as of December 2025: ₹16.1 lakh crore across 2.12 crore subscribers.