Presently withdrawals under NPS at the time of retirement are exempted upto 40% of total corpus. It means at least 20 % of withdrawal is taxed.
Question: Withdrawal may include employees portion as well which has been taxed during his/her service (sec 80 max limit 150000).
Doesn't it mean double taxation.
Please help me to get off the confusion with an example
Thankyou
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NPS Withdrawal
Replies (1)
You are not being double-taxed. The contributions were tax-deductible (you didn't pay tax on them initially), and the lump-sum withdrawal is tax-exempt. The only portion subject to income tax is the pension (annuity) income, which is treated as regular income once you start receiving it post-retirement.
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