This Smart Alternative To Mutual Funds Offers Bigger Tax Perks And Long-Term Security

Last Updated:November 04, 2025, 19:22 IST

Up to 60% of the retirement corpus can be withdrawn tax-free, while at least 40% must go toward an annuity for monthly pension. The lump sum can be taken at once or in phases

Investing in mutual funds, gold, or property is common advice, but the National Pension System (NPS) offers an excellent alternative for securing great returns and ensuring a stress-free retirement.

Recently, Kurian Jose, CEO of Tata Pension Management, emphasised that a happy and worry-free post-retirement life requires proactive planning and reliable investments rather than mere hope. By starting early, investors can take advantage of compounding benefits.

Long-Term Financial Security

NPS is an effective way to build a retirement fund while also saving on taxes annually. It allows individuals to invest in shares, central and state government bonds, corporate bonds, and alternative investments, providing returns through compounding.

Suitable for everyone from new employees to those nearing retirement, NPS encourages regular investing, which is essential for long-term wealth accumulation.

Tax Benefits

Additionally, NPS offers tax benefits in both the old and new tax regimes. Under the old regime, savings can be made through Sections 80C, 80CCD(1B), and 80CCD(2), whereas the new regime offers benefits through corporate NPS under Section 80CCD(2).

At retirement, up to 60% of the total fund can be withdrawn tax-free, with at least 40% used to purchase an annuity for monthly pension income. The lump sum can be taken at once or gradually as needed.

Overall, NPS serves as a reliable partner for present and future financial security, offering tax savings now and ensuring a comfortable retirement later. Planning ahead is crucial for obtaining a good pension and lump sum, as failing to do so can make achieving these goals difficult.

Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.

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