Types of NPS accounts
Tier I:
Contributions done to this account are eligible for an additional tax deduction benefit of up to ₹ . ₹ 50,000/- u/s 80CCD (1B), over and above ₹ .1,50,000/- u/s 80C. 60% of the invested amount can be withdrawn on completing 60 years and the rest will be used to provide an nuity.
Tier II:
One can invest an additional amount in Tier II NPS Account. This amount can be entirely withdrawn at any point of time. No tax benefits are available in this account. Kindly note that in order to open a Tier II acount, it is mandatory to open a Tier I acount first.
A subscriber can invest in both types of accounts under One Permanent Retirement Account Number (PRAN).