The National Pension System (NPS) is an excellent investment option for retirement funds and monthly pensions. By investing in NPS, you can not only secure your retirement but also avail tax exemption. In NPS, the investor gets a lump sum amount after retirement and along with it the benefit of a monthly pension is also available. The special thing is that there is no tax on the amount received on maturity. If you think that investment can be made in NPS only during the job, then you are wrong.

According to the new rules, investment in NPS can be continued even after retirement. Pension Fund Regulatory and Development Authority (PFRDA) has made many changes to make NPS more flexible. Now investment can be made even between the ages of 60 to 65 years, and the shareholder can continue contributing to NPS till the age of 70 years.

60 percent can be withdrawn on maturity
The entire fund cannot be withdrawn from NPS on maturity. 40 percent of the total fund is mandatorily used for an annuity, which provides a pension after retirement. The remaining 60 percent can be withdrawn as a lump sum. If you do not want to withdraw your NPS deposits even after retirement, the government allows you to do so.

Tax exemption is available.
Investing in NPS also provides the benefit of tax exemption. You are entitled to tax deduction under Sections 80CCD(1), 80CCD(1B), and 80CCD(2) of the Indian Income Tax Act, 1961. Under Section 80CCD(1B), an additional deduction of up to Rs 50,000 can be obtained on investment in NPS, which is in addition to the tax exemption of Rs 1.5 lakh under Section 80C.

Types of NPS accounts
NPS has two types of accounts: Tier 1 and Tier 2. Tier 1 account is a retirement account, in which certain conditions apply for withdrawal of money. At the same time, a Tier 2 account is like a savings account, from which you can withdraw money without any restrictions.