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Glossary
National Pension Scheme (NPS) : A government-sponsored pension scheme in India that allows individuals to invest in equity and debt to build a retirement corpus
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Types of Retirement & Pension Plan Schemes in India
National Pension Scheme (NPS): The NPS is a government-backed retirement savings plan designed to provide financial security after retirement. It is a voluntary, long-term investment plan regulated by the Pension Fund Regulatory and Development Authority (PFRDA). Under NPS, individuals contribute regularly to their pension accounts, and the funds are invested in a mix of equities, corporate bonds, and government securities based on their chosen asset allocation. Upon retirement, a portion of the corpus can be withdrawn as a lump sum, while the remaining amount is used to purchase an annuity, ensuring a steady income. NPS offers tax benefits under Section 123 and 124 of the Income Tax Act (previously referred to as Section 80C and 80CCD(1B) of the Income Tax Act 1961, respectively), making it an attractive option for retirement planning.