Income Tax
NPS (National Pension System)
Government pension scheme with tax benefits — additional ₹50,000 deduction under Section 80CCD(1B).
Full Definition
National Pension System (NPS) is a government-regulated pension scheme administered by PFRDA. Tax benefits: employee contribution to NPS up to ₹1.5L qualifies under 80C/80CCD(1); additional ₹50,000 is deductible under 80CCD(1B) — over and above the ₹1.5L 80C limit; employer's NPS contribution up to 10% of basic salary is deductible under 80CCD(2) with no upper limit. On maturity (60 years), 60% of corpus can be withdrawn tax-free; remaining 40% must be used to buy an annuity. NPS is available in Tier I (locked-in) and Tier II (flexible) accounts.
Related terms
More Income Tax terms
ITR (Income Tax Return)
Annual declaration filed with India's Income Tax Department reporting income, deductions and tax paid.
AY (Assessment Year)
The year in which income earned in the previous financial year is assessed and taxed.
FY (Financial Year)
The 12-month period from April 1 to March 31 during which income is earned and recorded.
PAN (Permanent Account Number)
Unique 10-character alphanumeric identifier issued by the Income Tax Department to every taxpayer.
TAN (Tax Deduction Account Number)
10-character number required by entities that deduct or collect tax at source (TDS/TCS).