What is NPS?

NPS stands for National Pension System. It is a government-run retirement scheme where you (and optionally your employer) contribute; the corpus is invested and used to give you a pension after 60.

NPS full form

NPS = National Pension System. It is regulated by PFRDA and is voluntary for most employees (some government jobs have mandatory NPS).

How NPS affects your salary

If you opt for NPS, a part of your salary is deducted and invested. You get tax benefit under 80CCD(1B) for an extra ₹50,000. Employer NPS contribution is also tax-beneficial. So NPS reduces your in-hand but can reduce tax and build retirement corpus.

NPS vs EPF

EPF is mandatory for many organised-sector employees; NPS is usually voluntary. Both help in retirement; NPS has more equity exposure and different withdrawal rules. Use a salary calculator to see in-hand with and without NPS.