NPS Vs EPF: Which Is Better?

Producer: Priyanka Das Editor: Manuj Yadav | February 21 , 2025

Planning for retirement is crucial, and in India, two prominent schemes help individuals secure their future: the National Pension System (NPS) and the Employee Provident Fund (EPF).

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While NPS is accessible to everyone, EPF is typically reserved for full-time employees. Check out their main features and differences.

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Tax-Free Annual Income Limit NPS: ₹13.7 lakh EPF: ₹12 lakh

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Employer Contribution Limit NPS: Up to 14% of basic salary (tax-deductible) EPF: Up to 12% of salary (tax-exempt)

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Employee Contribution Deduction NPS: Not deductible under the New Regime EPF: Not deductible under the New Regime

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Interest Rate NPS: Market-linked returns EPF: Fixed-rate of 8.25%

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Management Fees NPS: 0.09% per year EPF: Not applicable

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Flexibility NPS: High (asset allocation, fund switching) EPF: Low (fixed contributions and returns)

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Withdrawal Taxation NPS: Taxable on withdrawal EPF: Exempt under certain conditions

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