NPS in 2026: How It Works, Returns and the Tax You Actually Save

Under the new tax regime, only your employer's NPS contribution saves tax — up to 14% of basic pay under 80CCD(2)

The old regime still lets you claim ₹1.5 lakh plus an extra ₹50,000 for self-contributions

NPS funds returned roughly 8-9% over three years; the equity option swings far higher and lower

At 60 you can take up to 60% as tax-free lump sum; 40% buys a pension annuity

Fees are tiny and ₹1,000 a year keeps a Tier I account alive