The tax benefits of investing in NPS are:
- Tax deduction up to ₹50,000 under section 80 CCD(1B) over and above the overall ceiling of ₹1.50 lakh under section 80 CCE. This tax benefit is extended to self-employed individuals as well.
- Tax deduction on employer's contribution under section 80 CCD(2) over the limit of ₹1.50 lakh provided under section 80 CCE.
- Tax exemption on lumpsum withdrawal of 60% of accumulated pension wealth upon attaining the age of 60 under section 10(12A).
- Tax exemption on partial withdrawals of upto 25% of the self-contribution, as per the terms and conditions specified by PFRDA under section 10(12B).