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National Pension System (NPS)

PYQs

8

Articles

1

Momentum

21

Phase IFoundation

Background

Overview

NPS is a cornerstone of India's social security architecture and retirement planning. Its reforms reflect evolving government policy on financial inclusion, market liberalization, and individual responsibility in retirement, impacting public finance, financial markets, and citizen welfare.

The National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme in India, regulated by the Pension Fund Regulatory and Development Authority (PFRDA). It aims to provide old-age income security to citizens, encouraging them to save for retirement through market-linked returns.

Phase IIStatic core

Facts & tables

Key facts

Scheme Type & Regulation

Voluntary, defined contribution retirement savings scheme regulated by PFRDA.

Withdrawal Reforms (Dec 2025)

Increased lump sum withdrawal to 80% (from 60%) and reduced mandatory annuity to 20% (from 40%) at age 60.

Taxation of Withdrawals

Only 60% of lump sum withdrawal is tax-exempt under Section 10(12A) of the Income Tax Act; the additional 20% is taxable at slab rates.

Retirement Income Scheme (RIS)

Introduced for gradual, periodic withdrawals (SLW or SUR) from the non-annuity portion, allowing the balance to remain invested.

Reference table

Static syllabus anchors

TypeReference
Conceptual areaSocial Security
Conceptual areaFinancial Inclusion
Conceptual areaPublic Finance

Reference table

Institutions & roles

BodyRole
Pension Fund Regulatory and Development Authority (PFRDA)Regulates
Phase IIIExam lens

Prelims angle

Overview

Prelims angle: Factual recall

Prelims angle: Policy measures

Quick revision

  • Voluntary, defined contribution pension scheme.
  • Regulated by PFRDA.
  • Recent reforms: 80% lump sum withdrawal, 20% mandatory annuity.
  • 60% withdrawal tax-exempt under IT Act 10(12A); additional 20% taxable.
  • Introduced Retirement Income Scheme (RIS) for flexible post-retirement income.

High-confidence PYQs

2026Multi-statement analysis, Factual recall

Which of the following statements with regard to the persons with disabilities in India is/are correct ? 1. The Rights of Persons with Disabilities Act, an ...

Social Issues & SchemesOpen question
2024Factual recall, Conceptual understanding

With reference to the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) Yojana, consider the following statements: 1. The entry age group for enrolment in the sc...

Social Issues & SchemesOpen question

With reference to the 'Pradhan Mantri Surakshit Matritva Abhiyan', consider the following statements: 1. This scheme guarantees a minimum package of antenat...

Social Issues & SchemesOpen question
2024Multi-statement analysis, Factual recall

With reference to the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) Yojana, consider the following statements: 1. The entry age group for enrolment in the sc...

Social Issues & SchemesOpen question

With reference to the 'Pradhan Mantri Surakshit Matritva Abhiyan', consider the following statements: 1. This scheme guarantees a minimum package of antenat...

Social Issues & SchemesOpen question
2020Multi-statement analysis, Factual recall

With reference to the funds under Members of Parliament Local Area Development Scheme (MPLADS), which of the following statements are correct? 1. MPLADS fund...

Social Issues & SchemesOpen question
2018Multi-statement analysis, Conceptual understanding

With reference to the provisions made under the National Food Security Act, 2013 consider the following statements: 1. The families coming under the category...

EconomyOpen question

With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements 1. It is the flagship scheme of the Ministry of Labour and Employmen...

Social Issues & SchemesOpen question
2018Multi-statement analysis, Factual recall

With reference to the provisions made under the National Food Security Act, 2013 consider the following statements: 1. The families coming under the category...

EconomyOpen question

With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements 1. It is the flagship scheme of the Ministry of Labour and Employmen...

Social Issues & SchemesOpen question
2017Factual recall, Policy measures

Who among the following can join the National Pension System (NPS)?

Social Issues & SchemesOpen question
2016Multi-statement analysis, Factual recall

Regarding ‘Atal Pension Yojana’, which of the following statements is/are correct? 1. It is a minimum guaranteed pension scheme mainly targeted at unorganiz...

Social Issues & SchemesOpen question

Topic timeline

Social SecurityFinancial InclusionPublic Finance
Prelims 2016· Multi-statement analysis, Factual recall

Regarding ‘Atal Pension Yojana’, which of the following statements is/are correct? 1. It is a minimum guaranteed pension scheme mainly targeted at unorganiz...

Open question
Prelims 2017· Factual recall, Policy measures

Who among the following can join the National Pension System (NPS)?

Open question
Prelims 2018· Multi-statement analysis, Conceptual understanding

With reference to the provisions made under the National Food Security Act, 2013 consider the following statements: 1. The families coming under the category...

Open question

With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements 1. It is the flagship scheme of the Ministry of Labour and Employmen...

Open question
Prelims 2018· Multi-statement analysis, Factual recall

With reference to the provisions made under the National Food Security Act, 2013 consider the following statements: 1. The families coming under the category...

Open question

With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements 1. It is the flagship scheme of the Ministry of Labour and Employmen...

Open question
Prelims 2020· Multi-statement analysis, Factual recall

With reference to the funds under Members of Parliament Local Area Development Scheme (MPLADS), which of the following statements are correct? 1. MPLADS fund...

Open question
Prelims 2024· Factual recall, Conceptual understanding

With reference to the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) Yojana, consider the following statements: 1. The entry age group for enrolment in the sc...

Open question

With reference to the 'Pradhan Mantri Surakshit Matritva Abhiyan', consider the following statements: 1. This scheme guarantees a minimum package of antenat...

Open question
Prelims 2024· Multi-statement analysis, Factual recall

With reference to the Pradhan Mantri Shram Yogi Maan-dhan (PM-SYM) Yojana, consider the following statements: 1. The entry age group for enrolment in the sc...

Open question

With reference to the 'Pradhan Mantri Surakshit Matritva Abhiyan', consider the following statements: 1. This scheme guarantees a minimum package of antenat...

Open question
Prelims 2026· Multi-statement analysis, Factual recall

Which of the following statements with regard to the persons with disabilities in India is/are correct ? 1. The Rights of Persons with Disabilities Act, an ...

Open question

What new NPS withdrawal rules mean for retirement

06 Jul 2026 · NPS is India's market-linked, defined contribution pension scheme, recently reformed to allow higher lump sum withdrawals (80%) and introduce the Retirement Income Scheme (RIS) for flexible post-retirement income, though tax implications on the additional withdrawal remain.

Read article

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