Most people know 80C's ₹1.5L limit. NPS gives an additional ₹50,000 under 80CCD(1B) — over and above that limit. In the 30% bracket, this saves ₹15,600 (including cess) immediately. This extra benefit alone makes NPS worth considering for higher-income earners.
NPS is market-linked, managed by professional fund managers (SBI, LIC, HDFC Pension). You choose between equity, corporate bonds, and government securities, or let the system auto-allocate by age.
At least 40% must purchase an annuity (monthly pension). Remaining 60% withdrawable as tax-free lump sum. Tier I has lock-in; Tier II is like a mutual fund with no lock-in but no extra tax benefits.