Why NPS Deserves a Spot in Your Long-Term Portfolio

The National Pension System (NPS) has the lowest fund management cost in the world (around 0.09% per year).

The 3 Tax Layers:

1. Section 80CCD(1): Up to ₹1.5 Lakhs within Section 80C (Old Regime).

2. Section 80CCD(1B): Exclusive additional ₹50,000 deduction over and above 80C (Old Regime).

3. Corporate NPS [Section 80CCD(2)]: Employer contributes up to 10% of Basic salary directly into your NPS. This deduction is available in BOTH Old and New Tax Regimes!

Portfolio Setup Strategy:

Avoid default conservative settings. Select Active Choice and set:

  • Scheme E (Equity): 75% (Maximum permissible)
  • Scheme C (Corporate Bonds): 15%
  • Scheme G (Government Bonds): 10%

This delivers strong compounding throughout your career while maintaining sovereign debt safety.