Annuity in NPS
Secure Regular Pension from Your NPS Corpus
Hindi: NPS (National Pension Scheme) में retirement के समय accumulated corpus का एक हिस्सा annuity में invest होता है। इससे आपको नियमित pension प्राप्त होती है।
📌 What is Annuity?
✔ Portion of NPS retirement corpus is used to buy an annuity plan from life insurance companies
✔ Provides guaranteed periodic income (monthly/quarterly/yearly) after retirement
✔ Mandatory for at least 40% of NPS corpus for Tier I accounts at retirement
💰 Types of Annuities under NPS
1️⃣ Life Annuity: Pension paid for lifetime
2️⃣ Life Annuity with Return of Purchase Price: Pension for lifetime + corpus returned to nominee on death
3️⃣ Joint Life Annuity: Pension for retiree + spouse till both alive
4️⃣ Annuity Certain: Pension for a fixed period (5, 10, 15 years), then stops
📈 Tax Treatment
✔ NPS corpus growth is tax-free until withdrawal
✔ Pension received from annuity is taxable under Income Tax as per slab rates
✔ Returns of corpus on certain annuities may be exempt
🎯 Benefits of Annuity in NPS
✔ Guaranteed lifelong pension
✔ Security for retiree and family (joint life options)
✔ Predictable retirement income planning
✔ Partially tax-efficient if structured properly
⚠️ Considerations / Risks
❌ Limited liquidity after annuity purchase
❌ Returns may be lower compared to market-linked withdrawals
❌ Pension taxable under Income Tax slab
❌ Inflation may reduce purchasing power of fixed pension