Budget 2017: Changes to National Pension System (NPS)

Budget 2016 has proposed two changes to the national pension system. No, it not what you are looking for!!

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Change 1:

A subscriber whose NPS account is at least 10 years old will be eligible for withdrawing 25% of his/her contributions (without accrued income earned thereon). Employer contributions (if any) cannot be withdrawn.

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This 25% is now tax-free upon withdrawal but will be within the 40% overall tax free withdrawal limit.  Full details of when one can withdraw is here: NPS: Partial Withdrawal Rules

Change 2: 

Individuals who have subscribed to NPS on their own can now claim tax benefit of up to 20% of their salary under section 80CCD(1) which is part of 80C. Of course, the extra 50K under 80CCD(1B) is also there.

Also read: Budget 2017: Tax benefit illustration

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