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Should I opt for NPS or PPF for retirement savings as a salaried employee?

Asked 6 Mar 2026·589 views
I am 35 years old working in an IT company with a basic salary of Rs 1 lakh per month. My company offers NPS with 10% employer contribution. Should I also invest in PPF for retirement? What is the maximum I can contribute to both? Which gives better returns and tax benefits?
Asked by Vikram Mehta

6 Answers

33
With your company NPS contribution of 10% of basic (Rs 1 lakh annually), you should definitely maximize NPS Tier 1 as it gives additional 50% tax deduction on employer contribution under Section 80CCD(2), separate from the Rs 1.5 lakh 80C limit. NPS also has EEE status on returns if annuitized. Target 15-20% of your income for retirement including PPF.
Answered by Sunita Rao · 9 Mar 2026
33
With your company NPS contribution of 10% of basic (Rs 1 lakh annually), you should definitely maximize NPS Tier 1 as it gives additional 50% tax deduction on employer contribution under Section 80CCD(2), separate from the Rs 1.5 lakh 80C limit. NPS also has EEE status on returns if annuitized. Target 15-20% of your income for retirement including PPF.
Answered by Sunita Rao · 2 Apr 2026
33
With your company NPS contribution of 10% of basic (Rs 1 lakh annually), you should definitely maximize NPS Tier 1 as it gives additional 50% tax deduction on employer contribution under Section 80CCD(2), separate from the Rs 1.5 lakh 80C limit. NPS also has EEE status on returns if annuitized. Target 15-20% of your income for retirement including PPF.
Answered by Sunita Rao · 14d ago
27
PPF is excellent for retirement with EEE status (exempt-exempt-exempt) and currently offers 7.1% rate. Max contribution is Rs 1.5 lakh per year under 80C. For a balanced approach: NPS Tier 1 Rs 50,000 (over 80C limit) + PPF Rs 1.5 lakh + NPS employee contribution Rs 50,000 = Rs 2.5 lakh total retirement savings with triple tax benefit.
Answered by Priya Sharma · 25 Mar 2026
27
PPF is excellent for retirement with EEE status (exempt-exempt-exempt) and currently offers 7.1% rate. Max contribution is Rs 1.5 lakh per year under 80C. For a balanced approach: NPS Tier 1 Rs 50,000 (over 80C limit) + PPF Rs 1.5 lakh + NPS employee contribution Rs 50,000 = Rs 2.5 lakh total retirement savings with triple tax benefit.
Answered by Priya Sharma · 31 Mar 2026
27
PPF is excellent for retirement with EEE status (exempt-exempt-exempt) and currently offers 7.1% rate. Max contribution is Rs 1.5 lakh per year under 80C. For a balanced approach: NPS Tier 1 Rs 50,000 (over 80C limit) + PPF Rs 1.5 lakh + NPS employee contribution Rs 50,000 = Rs 2.5 lakh total retirement savings with triple tax benefit.
Answered by Priya Sharma · 15 Apr 2026

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