NPS stands for the National Pension System, which is a voluntary, long-term retirement savings scheme introduced by the Government of India in 2004. The NPS is designed to provide pension income to individuals during their retirement years.

Key features of the National Pension System (NPS):

1. Voluntary Contribution: NPS is open to all Indian citizens, including salaried employees, self-employed individuals, and even Non-Resident Indians (NRIs). Participation in the NPS is voluntary.
2. Two Tiers: NPS has two tiers - Tier I and Tier II. Tier I is the mandatory and primary pension account, while Tier II is an optional investment account that allows withdrawals at any time.
3. Investment Options: NPS offers multiple investment options to suit different risk appetites. Subscribers can choose from three types of investment funds: Equity (E), Corporate Bonds (C), and Government Securities (G). The default option is an Auto Choice, which automatically allocates the funds based on the subscriber's age.
4. Pension Fund Managers: NPS funds are managed by designated Pension Fund Managers (PFMs) appointed by the Pension Fund Regulatory and Development Authority (PFRDA). Subscribers can choose their preferred PFM or opt for the Auto Choice option.
5. Tax Benefits: NPS offers tax benefits to both the contributor and the subscriber. Contributions made by the individual to Tier I of NPS are eligible for tax deductions under Section 80CCD(1) of the Income Tax Act, subject to a certain limit. Additionally, contributions up to a specific limit can also be claimed as an additional tax deduction under Section 80CCD(1B).