Pension & Retirement Schemes — NPS, EPF, APY & More
Complete guide to India's retirement and pension schemes — NPS rules, EPF withdrawal, APY benefits, Varishtha Pension Bima Yojana, tax benefits, and retirement planning framework.
🏛️ Overview
India has multiple retirement and pension frameworks — from government-run schemes like NPS and APY to employer-linked EPF/EPS. The Pension Fund Regulatory and Development Authority (PFRDA), established under the PFRDA Act, 2013, regulates NPS and APY. EPF is managed by EPFO. Understanding these schemes is critical for building a retirement corpus, as India has no universal social security system.
📊 NPS — National Pension System
- ✅ At maturity: Minimum 40% must be used to buy annuity. Up to 60% lump sum withdrawal (tax-free).
- ✅ Premature exit (after 5 years): 80% annuity, 20% lump sum withdrawal.
- ✅ Partial withdrawal: After 3 years, up to 25% of own contributions. Max 3 times during subscription. Permitted for education, marriage, house purchase, illness, disability.
- ✅ Tax: Sec 80CCD(1) — up to 10% of salary (within 80C limit). Sec 80CCD(1B) — additional ₹50,000 (exclusive). Sec 80CCD(2) — employer contribution up to 14% of basic (govt) or 10% (others).
🔰 APY — Atal Pension Yojana
- ✅ Who: Indian citizens aged 18-40, with bank/post office account. Not for income tax payers (from Oct 2022).
- ✅ Guaranteed Pension: ₹1,000 / ₹2,000 / ₹3,000 / ₹4,000 / ₹5,000 per month at age 60. Government guarantees the pension amount.
- ✅ Spouse benefit: After subscriber's death, same pension to spouse. After both deaths, corpus returned to nominee.
- ✅ Example: For ₹5,000/month pension, a 25-year-old pays ₹376/month. A 35-year-old pays ₹902/month.
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⚠️ Disclaimer
This page is for educational and informational purposes only and does not constitute legal, tax, or financial advice. While we strive for 100% accuracy, laws and regulations change frequently. Always refer to the official gazette notifications, consult a qualified Chartered Accountant (CA), Company Secretary (CS), or legal professional before making any financial or legal decisions. Tenhash is not responsible for any actions taken based on this information. Last reviewed: March 2026.