Retirement on WebNotes

ELSS vs NPS

Tue, 12 May 2026 00:00:00 +0000

Equity Linked Savings Scheme (ELSS) and the National Pension System (NPS) are both used to claim income tax deductions in India, but they operate under different regulatory frameworks, serve different investor objectives, and carry different conditions on withdrawal. ELSS is a mutual fund category regulated by the Securities and Exchange Board of India. NPS is a defined-contribution pension scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and governed by the PFRDA Act, 2013.

Mutual fund vs NPS Tier-II

Tue, 12 May 2026 00:00:00 +0000

The NPS Tier-II account is an optional voluntary savings account within the National Pension System (NPS) framework, managed by PFRDA-registered pension fund managers (PFMs). Unlike the NPS Tier-I account (which has lock-in until age 60 and mandatory annuity requirements), the Tier-II account has no lock-in and withdrawals are freely permitted. This positions it conceptually as a savings vehicle that competes with open-ended mutual funds for discretionary savings.

Structure

NPS Tier-II

The Tier-II account requires an existing active NPS Tier-I account (with a PRAN). It cannot be opened independently. The minimum contribution at account opening is Rs 1,000, with a minimum per-contribution of Rs 250 thereafter. There is no mandatory minimum annual contribution.

NPS on Coin (Zerodha)

Mon, 11 May 2026 00:00:00 +0000

Zerodha’s Coin platform provides access to the National Pension System (NPS), a government-sponsored defined-contribution pension scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). NPS allows Indian citizens between 18 and 70 years of age to build a retirement corpus through regular contributions to market-linked pension funds. Contributions qualify for tax deductions under Sections 80CCD(1), 80CCD(1B), and 80CCD(2) of the Income Tax Act, 1961.

Zerodha acts as a Point of Presence (PoP) registered with PFRDA, enabling it to onboard new NPS subscribers and accept contributions through the Coin interface.