Have you ever wondered how you could save more of your money while planning for your future? Let's talk about the **National Pension System (NPS)** and how it could be your gateway to some amazing tax benefits!

[What is NPS](https://pensionbox.in/blog/What-is-NPS)? Well, it is an amazing way to save your hard-earned money for retirement. It's pretty cool because not only does it help you save up for the future, but it also gives you tax benefits.

So, how does it work? When you put money into your NPS account, **you can claim a deduction of up to INR 50,000 on your taxable income**. How awesome is it that the government lets you save for tomorrow and rewards you by reducing your tax burden today?

## Let's take a closer look at how NPS can be a smart choice for your retirement savings with its tax benefits.


### 1. Tax benefits on contributions-

Let's simplify it. When you invest in NPS, you can get an additional **deduction of up to INR 1.5 Lakhs under Section 80C of the Income Tax Act**. But that's not it, If you're contributing to the NPS under the corporate sector i.e. [Corporate NPS](https://pensionbox.in/blog/Difference-between-Individual-and-Corporate-account-in-NPS), you can **claim an extra deduction of up to 10% of your salary (Basic + DA) under Section 80CCD(2)**. 

But, when you finally retire and start withdrawing money from your NPS account, only a part of it is taxable.

### 2. Additional deductions on NPS- 

Apart from the INR 1.5 lakh deduction under Section 80C, an **additional benefit of up to INR 50,000 is available under Section 80CCD(1B)** exclusively for NPS contributions. This means you can claim an extra deduction over and above the INR 1.5 lakh limit.

### 3. Tax-free returns- 

When you retire and start receiving pension from your NPS account, a portion of it (up to 60%) is tax-free. The remaining **40% is taxable** but can be delayed until withdrawal or annuitization, offering tax benefits even during retirement.

### 4. Low-Cost Investment with Tax Benefits-

NPS is a cost-effective investment tool, that comes with tax benefits, so it becomes an attractive option to build your retirement corpus. The scheme allows investing in a mix of assets like equity, government securities, and corporate bonds, providing flexibility and potential for good returns over the long term.

### 5. Voluntary Contribution for Additional Tax Savings- 

Apart from the mandatory contribution (10% of salary + DA) under the corporate NPS  or NPS for self-employed, you can make additional voluntary contributions to avail of further tax benefits.

So, if you're looking to save more money and plan for your retirement, NPS might just be the perfect choice for you. Take advantage of [opening an NPS account with PensionBox](https://pensionbox.in/getstarted)- **India’s Coolest Digital Pension Platform** all while experiencing the fastest way to open an NPS ever, taking up only 3 minutes for those impressive tax benefits and secure a brighter future while saving on your taxes today!

Have you ever wondered how you could save more of your money while planning for your future? Let's talk about the National Pension System (NPS) and how it could be your gateway to some amazing tax benefits!

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