An essential guide to National Pension System (NPS)

The National Pension System is an initiative of the government to extend pension benefits to all Indian citizens. It is mandatory for central-government employees and the employees of some state governments to invest in the NPS. As per the earlier government directive, private-sector employees were proposed to be given a choice between the Employees' Provident Fund Organisation (EPFO) and the NPS which was later withdrawn. The employee contribution is generally 10 per cent of the basic salary and DA, with a matching contribution made by the employer. For central-government employees, the contribution by the government has been raised to 14 per cent. You can open two types of account under NPS - Tier I and Tier II. Now there is an additional account called Tier II - Tax Saver Scheme (NPS - TTS) available only for central- government employees.

This article was originally published on November 03, 2021, and last updated on September 15, 2022.