Tax on nps tier II , when it is transfered to tier I

Summary

• Transfer: Moving funds from Tier II to Tier I is a tax-neutral event.

• Taxation: Tier II is not tax-efficient; its returns are generally subject to your marginal income tax rate upon withdrawal.

• Strategy: While you can transfer Tier II funds to Tier I, doing so does not retroactively grant tax benefits to those funds. The primary advantage of this transfer is often moving funds into the more "locked-in" and regulated environment of Tier I.