What do you think about NPS as a tax saving investment?

NPS is a good tax saving alternative. Under section 80 CCD (1B) you can save tax on investment of max of Rs 50000 in NPS. This is over and above section 80 (C).

With recent changes, NPS allows you to withdraw 60% of the total investment (plus returns) without having to pay any tax.

However, looking at an investment just from the tax saving angle may not be advisable.

Though NPS is a good investment during the accumulation period, it has some not so favorable clauses during the maturity period. NPS asks you to compulsorily push 40% of your maturity amount in an Annuity (Pension) plan of an Insurance Company. Investing at the mercy of Insurance company at the point of your retirement may not be a good idea. Moreover, the pension received from the Insurance company will be taxable.

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