Recently the government notified withdrawals from National Pension System (NPS) completely tax free. NPS offers two types of accounts: Tier I and Tier II. Investment in Tier I account offers numerous income tax benefits but withdrawal by subscribers is not permitted till the age of 60 with few exceptions. I-T rules offers deduction of Rs 50,000 u/s 80CCD (1B) under Tier-I NPS account in addition to the Rs 1.50 lakh deduction u/s 80C, 80CCC (investment in pension plan offered by an insurer) and Section 80CCD (1). Investment in NPS is available to both salaried individual and self-employed.