Common questions on retirement and pension — EPS, NPS, gratuity, PPF, SCSS and family pension — answered by a practising CA.
Retirement & PensionWhat is the Senior Citizen Savings Scheme (SCSS) interest and limit?Bottom line: SCSS earns 8.2% a year for the July–September 2026 quarter, for those aged 60+, up to ₹30 lakh. 1. Rate 8.2% for the current quarter, paid…Retirement & PensionHow much corpus do I need to retire?Bottom line: A common rule of thumb is about 25 times your annual expenses, from the 4% safe-withdrawal rule. 1. The idea If you withdraw about 4% a…Retirement & PensionIs family pension taxable, and what deduction is available?Bottom line: Family pension is taxable as "other sources", with a deduction of one-third or ₹15,000 (old regime) / ₹25,000 (new regime), whichever is lower. 1. Taxable head…Retirement & PensionCan I withdraw my full EPF after leaving a job, and is it taxable?Bottom line: You can withdraw your PF after leaving, but it is taxable if you had less than 5 years of continuous service. 1. When EPFO allows 75%…Retirement & PensionWhat is the Atal Pension Yojana and how much pension does it give?Bottom line: APY gives a guaranteed pension of ₹1,000 to ₹5,000 a month from age 60, based on your contribution and joining age. 1. Pension slabs ₹1,000, ₹2,000,…Retirement & PensionHow much of my NPS can I withdraw tax-free at retirement?Bottom line: At 60, up to 60% of the corpus is tax-free and at least 40% must buy an annuity. 1. Lump sum Up to 60% can be…Retirement & PensionHow is gratuity taxed for government versus private employees?Bottom line: Government gratuity is fully exempt; for private employees it is exempt up to ₹20 lakh. 1. Government Fully exempt, with no ceiling. 2. Private (Gratuity Act)…Retirement & PensionWhat is a superannuation fund and how is it taxed?Bottom line: A superannuation fund is an employer retirement benefit; the employer's contribution is tax-free up to a combined ₹7.5 lakh. 1. The cap Employer contributions to PF,…Retirement & PensionIs PPF a good retirement tool and what is the maturity?Bottom line: PPF is a safe, tax-free retirement builder earning 7.1% for the July–September 2026 quarter. 1. Rate and tenure 7.1% for the current quarter, with a 15-year…Retirement & PensionHow is EPS pension calculated and what is the minimum pension?Bottom line: EPS pension uses a simple formula, with a minimum of ₹1,000 a month, payable from age 58 after 10 years of service. 1. Formula Monthly pension…