Question 1

Which is better, NPS or PPF?

Accepted Answer

It depends on two things this page makes explicit. If your 80C is already full, NPS gives you a deduction PPF simply cannot reach, and that is worth your slab rate every year. If you need the money back as cash, PPF returns all of it while NPS locks a minimum share into an annuity. The returns matter less than either, which is why the page reports the return NPS would need rather than declaring a winner.

Question 2

Why does the page lead with cash rather than corpus?

Accepted Answer

Because a corpus you cannot spend is not comparable to one you can. NPS rules require a minimum share of the corpus to buy an annuity at exit, so a large part of it comes back as monthly income rather than as a lump sum. Comparing the two corpuses side by side overstates the NPS advantage, sometimes by a factor of eight.

Question 3

Is the extra ₹50,000 deduction always worth having?

Accepted Answer

No, and this is the part most pages get wrong. Section 80CCD(1B) is a separate ceiling on top of 80C, so it only helps if 80C is already used or if you invest more than the 80C ceiling. Somebody putting ₹1,50,000 a year into either scheme with 80C empty gets exactly the same deduction from both.

Question 4

What return should I assume for NPS?

Accepted Answer

That is the question this page hands back to you rather than answering. NPS is market-linked and its return depends on your equity, corporate debt and government bond mix, none of which anybody guarantees. The break-even figure tells you what NPS would have to earn to match a PPF rate the government does publish, which is a more useful thing to argue about than a forecast we invented.

Question 5

Can I use both?

Accepted Answer

Yes, and for many people that is the answer. PPF up to what your 80C room allows, and NPS on top for the separate ₹50,000 deduction, gets you both the exempt returns and the extra relief. This page compares them one against the other because that is how the question is usually asked, not because they are exclusive.

Question 6

Does this include tax on the pension?

Accepted Answer

No. PPF interest is exempt on a published source. The NPS lump sum is exempt within the limits the rules set, but the annuity is taxed as income in the year it is received, at whatever slab applies then. The monthly pension shown here is before that tax, so treat it as a gross figure.

NPS vs PPF Calculator