Question 1

What is the minimum annuity percentage in NPS?

Accepted Answer

At retirement, you must use at least 40% of your NPS corpus to purchase an annuity plan that provides a monthly pension. The remaining 60% can be withdrawn as a tax-free lump sum.

Question 2

What are the tax benefits of NPS?

Accepted Answer

NPS offers tax benefits under Section 80CCD(1) up to Rs 1.5 lakh (within 80C limit) and an additional Rs 50,000 deduction under Section 80CCD(1B), making a total deduction of up to Rs 2 lakh.

Question 3

What is the expected return from NPS?

Accepted Answer

NPS returns depend on the asset allocation chosen. Historically, NPS equity funds have delivered 10-12% annual returns, while debt and government bond funds have delivered 8-10% over the long term.

Financial Calculators