NPS

NPS stands for the National Pension System. It is a voluntary retirement savings account, regulated by the pension regulator PFRDA, that you pay into during your working years to build a pension for later.

On the old tax regime, NPS gives an extra deduction of up to 50,000 rupees, over and above the usual 1.5 lakh rupee limit. It is not available on the new regime, so check your regime and the current rules first.

Under PFRDA's exit regulations, as last amended on 20 July 2026, most non-government subscribers must use at least 20% to buy an annuity that pays a pension for life, and can take up to 80% as a lump sum. A pot of 8 lakh rupees or less can be taken in full; between 8 and 12 lakh, up to 6 lakh as a lump sum. Government employees must put at least 40% into an annuity. Confirm the current PFRDA position.