NISM Series X-B · Chapter 5: Retirement Products

L1 · Foundation

Foundation — EPF, VPF, PPF, Gratuity and the Superannuation Benefit

The EPF contribution split and its four employer heads, interest and dormancy, complete and partial withdrawal, and the tax rules; VPF; PPF eligibility, lock-in, limits, loans, withdrawals, extension and EEE taxation; gratuity for employees covered and not covered by the Act, with both formulas worked; and the superannuation benefit with its commutation rule.

30 min read · Worth 7% of the paper · Written from pages 82–120 of the official NISM workbook · Updated 18 September 2026

5.1 Accumulation related products

5.1.1 Employees Provident Fund

Where the employer's 12 per cent actually goes

The employee's entire 12 per cent goes to his EPF account. The employer's 12 per cent does not — it splits four ways:

Category	Percentage of contribution
Employees Provident Fund	3.67%
Employees' Pension Scheme (EPS)	8.33% — subject to a ceiling of Rs 15,000 monthly salary
Employee's Deposit Linked Insurance Scheme (EDLIS)	0.5%
EPF Admin Charges	0.50%

This is the single most examinable table in the section. The employee's whole contribution accumulates; the employer's largest slice — 8.33 per cent — goes to a pension scheme, not to the provident fund.

When the rate is not 12 per cent

And the concession for new women employees:

The two reasons given: TO ENABLE WOMEN FOR HIGHER TAKE-HOME PAY, and TO ENCOURAGE COMPANIES TO HIRE MORE WOMEN TO BRIDGE THE GAP.

And the crucial rider: EVEN THOUGH A WOMAN EMPLOYEE CONTRIBUTES 8% TOWARDS EPF, THE EMPLOYER HAS TO MAINTAIN ITS EPF CONTRIBUTION AT 12%.

Also: an employee CAN ALSO ADD MORE THAN 12% towards EPF — this is the VOLUNTARY PROVIDENT FUND. And EPF WILL CONTINUE TO BE ACTIVE AS LONG AS YOU ARE A SALARIED EMPLOYEE. IF YOU SWITCH JOBS, IT IS PARAMOUNT TO UPDATE YOUR EPF INFORMATION WITH YOUR NEW EMPLOYER TO CONTINUE THEIR CONTRIBUTION.

Interest

Calculated MONTHLY, credited ANNUALLY on 31 March.

Dormant and inoperative accounts — two different states

State	When	Does interest accrue?
INACTIVE or DORMANT	No contributions for 3 consecutive years	YES — interest is paid on the EPF account UNTIL THE EMPLOYEE RETIRES. But the interest earned on inactive accounts is TAXABLE as per the employee's tax slab rate
INOPERATIVE	No contributions received for 3 years AFTER RETIREMENT; or PERMANENT MIGRATION ABROAD; or in case of DEATH	NO interest will accrue

The workbook's footnote: the SENIOR CITIZENS' WELFARE FUND, established by the Central Government under the FINANCE ACT, 2015, is to be utilised for schemes for the promotion of the welfare of senior citizens.

And one more rule: THE EMPLOYER'S SHARE CONTRIBUTED TOWARDS THE EMPLOYEE PENSION SCHEME (EPS) DOES NOT ACCRUE INTEREST. However, A MEMBER IS ELIGIBLE TO RECEIVE HIS OR HER PENSION ONLY AFTER THE AGE OF 58.

Complete withdrawal

The staged rule on unemployment:

Table 5.1 — Partial withdrawal

#	Reason	Limit for withdrawal	Years of service required	Other conditions
1	Medical purposes	6 MONTHS basic salary and DA, OR total employee's share plus interest, WHICHEVER IS LOWER	NO CRITERIA	Medical treatment of self, spouse, children, or parents
2	Marriage	Up to 50% of employee's share of contribution with interest	7 YEARS	For the marriage of self, son/daughter, and brother/sister
3	Education	Up to 50% of employee's share of contribution with interest	7 YEARS	Account holder's education or child's education (POST MATRICULATION)
4	Purchase of land or purchase/construction of a house	LAND: up to 24 MONTHS basic + DA. HOUSE: up to 36 MONTHS basic + DA. OR total of employee and employer share with interest, OR total cost — WHICHEVER IS LEAST	5 YEARS	Asset in the name of the employee or jointly with the spouse; withdrawable JUST ONCE during the entire service; construction must BEGIN WITHIN 6 MONTHS and be COMPLETED WITHIN 12 MONTHS from the last withdrawn instalment
5	Home loan repayment	Least of: up to 36 MONTHS basic + DA; OR total corpus of employer and employee contribution with interest; OR total outstanding principal and interest on the housing loan	10 YEARS	Property registered in the name of the employee or spouse or jointly; requisite documents required; the accumulation in the PF account, or together with the spouse, including interest, must be MORE THAN RS 20,000
6	House renovation	Least of: up to 12 MONTHS basic wages and DA; OR employee's contribution with interest; OR total cost	5 YEARS	Property in the name of employee or spouse or jointly; available TWICE — after 5 years of completion of the house, and after 10 years from the withdrawal for renovation
7	Partial withdrawal before retirement	Up to 90% of accumulated balance with interest	Once the employee reaches 54 YEARS, and withdrawal within ONE YEAR of retirement or superannuation, whichever is later

The service-year ladder is worth memorising on its own: MEDICAL — no criteria; LAND, HOUSE PURCHASE and RENOVATION — 5 years; MARRIAGE and EDUCATION — 7 years; HOME LOAN REPAYMENT — 10 years.

Tax implications

On contribution. The contributions made by the employee to EPF are ELIGIBLE FOR DEDUCTION UNDER SECTION 80C.

On interest. As per FINANCE ACT 2021, THE ANNUAL INTEREST EARNED ON EMPLOYEE CONTRIBUTION EXCEEDING RS 2.50 LAKHS PER ANNUM IS TAXABLE. THIS INCLUDES THE CONTRIBUTION IN VOLUNTARY PROVIDENT FUND ACCOUNT.

On the employer's contribution — the aggregate Rs 7.5 lakh rule:

Two limits, easily confused: RS 2.5 LAKH on the EMPLOYEE's own contribution (EPF plus VPF), and RS 7.5 LAKH on the aggregate EMPLOYER contribution across EPF, NPS and superannuation.

Tax on withdrawal

A. BEFORE FIVE YEARS. If the employee has NOT completed a consecutive five years of service, THE AMOUNT WITHDRAWN IS TAXABLE in the year of receipt. Two exceptions keep it tax-free:

If the employment is TERMINATED DUE TO THE EMPLOYEE'S ILL HEALTH, OR THE EMPLOYER HAS DISCONTINUED ITS BUSINESS, OR ANY OTHER REASON BEYOND THE CONTROL OF THE EMPLOYEE.
If the employee CHANGES HIS EMPLOYER in less than five years and TRANSFERS HIS PF BALANCE to the new employer. Therefore IT IS ALWAYS SUGGESTIBLE TO TRANSFER THE PF BALANCE WHILE CHANGING JOBS TO AVOID ANY TAXATION.

B. AFTER FIVE YEARS. The amount withdrawn is TAX-FREE in the year of receipt.

C. OTHERWISE — the Rs 50,000 TDS rule.

If the withdrawal is LESS THAN RS 50,000 before five years, the individual PAYS TAX at his slab rate if he falls in the taxable bracket.
If the withdrawal is MORE THAN RS 50,000 before five years, TAX IS DEDUCTED AT SOURCE. IF PAN IS FURNISHED, 10% TDS. IF PAN IS NOT FURNISHED, TDS AT THE MAXIMUM MARGINAL RATE. HOWEVER, IF FORM 15G/15H IS SUBMITTED, TDS WILL NOT APPLY.

5.1.2 Voluntary Provident Fund

The contributions will be INVESTED IN THE EPF ACCOUNT of the employee. Like the primary account, the investments will be PREDOMINANTLY IN DEBT INVESTMENTS, PARTICULARLY GOVERNMENT SECURITIES.
Return: THE RETURN ON THE INVESTMENT WILL BE DECLARED EACH YEAR BY THE GOVERNMENT.
Investment limits: THE SUBSCRIBER CAN INVEST ANY PERCENTAGE OF THE BASIC SALARY, GOING UP TO 100% OF BASIC SALARY AND DEARNESS ALLOWANCE. The amount CAN BE DECIDED BY THE SUBSCRIBER AND DISCONTINUED WITH PRESCRIBED NOTICE.
Tenure: THE VPF IS OPEN-ENDED AND SUBSCRIBERS CAN CONTRIBUTE TILL THE TIME OF RETIREMENT. WITHDRAWAL IS POSSIBLE ACCORDING TO THE RULES OF EPF.
Taxation: ALL CONTRIBUTIONS, INTEREST EARNED AND WITHDRAWALS ARE EXEMPT FROM TAX UP TO A SPECIFIED LIMIT. IF THE AGGREGATE EMPLOYEE CONTRIBUTION TO EPF PLUS VPF EXCEEDS RS 2.5 LAKH IN A FINANCIAL YEAR, THEN THE INTEREST EARNED ON THE EXCESS AMOUNT IS TAXABLE AS INTEREST INCOME.

The defining feature: NO EMPLOYER MATCH, and the Rs 2.5 lakh interest threshold is shared with EPF.

5.1.3 Public Provident Fund

Eligibility

ONLY AN INDIAN RESIDENT CAN OPEN A PPF ACCOUNT.
NRIs ARE NOT ELIGIBLE TO OPEN PPF ACCOUNTS. POST SEPTEMBER 30, 2024, EXISTING ACCOUNT HOLDERS WHO ATTAINED NRI STATUS WILL BE ABLE TO CONTRIBUTE FURTHER BUT CANNOT EXTEND THE DURATION OF THEIR PPF ACCOUNTS. THESE ACCOUNTS WILL NOT EARN ANY INTEREST POST SEPTEMBER 30, 2024.
PARENTS OR GUARDIANS CAN ALSO OPEN PPF ACCOUNTS FOR THEIR MINOR CHILDREN.
OPENING OF JOINT ACCOUNTS AND MULTIPLE ACCOUNTS ARE NOT ALLOWED.

Key features

LOCK-IN PERIOD: a fixed-income, long term investment with a LOCK-IN PERIOD OF 15 YEARS. PREMATURE WITHDRAWALS ARE ALLOWED AFTER 5 YEARS subject to conditions and limits. This tenure CAN BE EXTENDED IN BLOCKS OF 5 YEARS at the end of the first 15 year lock-in. However, POST SEPTEMBER 2024, NRIs DO NOT HAVE THIS EXTENSION PRIVILEGE once their accounts mature.
MINIMUM AND MAXIMUM: minimum of RS 500 ANNUALLY; maximum of RS 1.5 LAKH in one year. An individual CAN CONTRIBUTE NOT MORE THAN RS 1.50 LAKH TO HIS PPF ACCOUNT AND THE PPF ACCOUNT OF THE MINORS TAKEN TOGETHER.
TAXATION: PPF comes under the EXEMPT-EXEMPT-EXEMPT (EEE) CATEGORY — the principal is allowed as a deduction under SECTION 80C, while the interest earned and the maturity amount are EXEMPT.
LOAN AGAINST PPF: available FROM THE BEGINNING OF THE 3RD FINANCIAL YEAR TILL THE END OF THE 6TH FINANCIAL YEAR from account opening, UP TO A MAXIMUM OF 25% OF THE TOTAL BALANCE AT THE END OF THE 2ND FINANCIAL YEAR IMMEDIATELY PRECEDING THE YEAR IN WHICH LOAN IS APPLIED.

Interest rate

Partial withdrawals

FORM-2 must be submitted, giving account number and amount, with a declaration that no other amounts were withdrawn during the same financial year, an additional declaration for a minor's account that the amount is required for the use of the minor child who is still a minor and is alive, and the passbook.

Extension of tenure

WITH contribution — FORM-4.

The choice has to be made WITHIN ONE YEAR BEFORE THE DATE OF MATURITY; OTHERWISE THE DEFAULT CHOICE OF EXTENSION WITHOUT FURTHER CONTRIBUTION APPLIES.
A MAXIMUM OF 60% OF THE BALANCE AS ON THE DATE OF EXTENSION CAN BE WITHDRAWN, either in one go or spread over several years, with a maximum of one withdrawal in a year.

WITHOUT further contribution — the default.

NO SEPARATE FORM NEEDS TO BE FILLED.
A MAXIMUM OF ONE WITHDRAWAL PER FINANCIAL YEAR, AND ANY AMOUNT UP TO THE TOTAL BALANCE CAN BE WITHDRAWN.

And the irreversibility: ONCE THE PPF ACCOUNT IS RENEWED WITH OR WITHOUT CONTRIBUTION, THE OPTION CANNOT BE SWITCHED. IN CASE THE AMOUNT IS DEPOSITED WITHOUT CHOOSING THE CORRECT OPTION, NO INTEREST WILL BE PAYABLE ON SUCH AMOUNT, AND NO DEDUCTION UNDER THE INCOME TAX ACT WILL BE AVAILABLE ON SUCH CONTRIBUTIONS.

Premature closure — three grounds

After completing 5 financial years from the end of the year of account opening, subject to:

TO UTILIZE ACCUMULATED SAVINGS FOR TREATMENT OF LIFE THREATENING DISEASES, AILMENTS OR ANY OTHER MEDICAL EMERGENCY OF SELF, SPOUSE, PARENTS OR CHILDREN
TO FINANCE HIGHER EDUCATION OF SELF OR DEPENDENT CHILDREN
IF THERE IS A CHANGE IN RESIDENCY STATUS OF THE ACCOUNT HOLDER

Note the tax point the workbook adds: the interest earned MUST BE DECLARED ON THE INCOME TAX RETURN, even though it is exempt.

5.1.4 Gratuity

Who is covered by the Act

For employees COVERED under the Act

The formula is based on 15 DAYS OF LAST DRAWN SALARY FOR EACH COMPLETED YEAR OF SERVICE OR PART THEREOF IN EXCESS OF 6 MONTHS:

LAST DRAWN SALARY means BASIC SALARY, DEARNESS ALLOWANCE, AND COMMISSION BASED ON SALES.

The worked example: A's last drawn basic pay is Rs 60,000 per month and he has worked with XYZ Ltd for 20 YEARS AND 7 MONTHS.

(15 × 60,000 × 21) ÷ 26 = Rs 7.26 lakh

For employees NOT covered under the Act

On the same facts: (15 × 60,000 × 20) ÷ 30 = Rs 6 lakh.

Two differences, and both change the answer: the DIVISOR (26 versus 30) and the ROUNDING of service (part-year over 6 months counts versus completed years only).

Gratuity to Central Government employees

Table 5.2 — Death gratuity rates

Qualifying service	Rate
Less than one year	2 times of basic pay
One year or more but less than 5 years	6 times of basic pay
5 years or more but less than 11 years	12 times of basic pay
11 years or more but less than 20 years	20 times of basic pay
20 years or more	Half of the basic salary for each completed six-monthly period, SUBJECT TO A MAXIMUM OF 33 TIMES OF THE BASIC SALARY

The maximum benefit is restricted to Rs 20 lakh.

Taxability

For PRIVATE sector employees COVERED under the Act, exempt to the extent of the LEAST of:

Statutory limit of RS 20 LAKH
LAST DRAWN SALARY × 15/26 × NUMBER OF COMPLETED YEARS OF SERVICE
GRATUITY ACTUALLY RECEIVED

(Salary includes BASIC PAY PLUS DEARNESS ALLOWANCE.)

For PRIVATE employees NOT covered, exempt to the extent of the LEAST of:

Statutory limit of RS 20 LAKH
AVERAGE SALARY × ONE HALF × NUMBER OF YEARS OF SERVICE
ACTUAL GRATUITY RECEIVED

(Salary includes basic pay, dearness allowance and COMMISSION BASED ON THE PERCENTAGE OF TURNOVER. THE AVERAGE SALARY IS TAKEN AS THE AVERAGE OF THE SALARY OF LAST 10 MONTHS IMMEDIATELY PRECEDING THE LAST WORKING MONTH.)

5.1.5 The superannuation benefit

Two ways to offer a group superannuation scheme:

THROUGH THE CONSTITUTION OF A TRUST FUND, WHERE FUND MANAGERS ARE APPOINTED BY THE TRUSTEES TO MANAGE THE FUND.
THROUGH INVESTMENT IN A SUPERANNUATION SCHEME FROM A LIFE INSURANCE COMPANY.

Commutation

The two limits

Think of it like this

Twelve plus twelve does not make twenty-four in the PF account

The employee's 12 per cent goes entirely to EPF. The employer's 12 per cent splits four ways — only 3.67% to EPF, while 8.33% goes to the Employees' Pension Scheme (subject to a Rs 15,000 monthly salary ceiling), 0.5% to EDLIS and 0.50% to admin charges. The employer's biggest slice buys a pension, not a provident fund balance — and the EPS share does not accrue interest, with pension payable only after age 58.

Dormant still earns; inoperative does not

Two states that sound alike. No contributions for 3 consecutive years makes an account INACTIVE OR DORMANT — yet interest is still paid until the employee retires, though that interest is taxable at his slab rate. No contributions for 3 years AFTER RETIREMENT, or permanent migration abroad, or death, makes it INOPERATIVE — and no interest accrues. After 7 inoperative years the money goes to the Senior Citizen Welfare Fund, reclaimable within 25 years.

Seventy-five, then twenty-five

Lose your job and you may take 75% of the corpus after 1 month of unemployment; the remaining 25% only if unemployed for 2 months or more. Find work within the month and that 25% is transferred to the new EPF account instead. The one exception to the two-month wait: it does not apply to women who quit their jobs for marriage.

Five, seven, ten — the service ladder for partial withdrawal

Memorise the required years of service by purpose. Medical — no criteria at all. Land, house purchase and house renovation — 5 years. Marriage and education — 7 years. Home loan repayment — 10 years. And a separate rule entirely for age: up to 90% of the balance once the employee reaches 54, withdrawn within one year of retirement.

Two thresholds, two payers

Do not confuse them. Rs 2.5 lakh is the cap on the EMPLOYEE'S own annual contribution (EPF plus VPF) above which the interest becomes taxable. Rs 7.5 lakh is the cap on the aggregate EMPLOYER contribution across EPF, NPS and superannuation above which the contribution and its return become a perquisite in the employee's hands.

Always transfer the PF when you change jobs

Withdraw before five years of continuous service and the amount is taxable in the year of receipt — with 10% TDS if PAN is furnished and TDS at the maximum marginal rate if not, where the sum exceeds Rs 50,000. But if the employee transfers his PF balance to the new employer, the balance remains tax-free. Hence the workbook's advice: it is always suggestible to transfer the PF balance while changing jobs to avoid any taxation.

Twenty-six or thirty — the divisor decides the gratuity

Same salary, same service, two answers. Covered by the Act: (15 × last drawn salary × tenure) ÷ 26, counting a part-year over 6 months as a full year — so 20 years 7 months becomes 21, giving Rs 7.26 lakh. Not covered: divide by 30 and count only completed years — so the same service is 20, giving Rs 6 lakh. Two changes, one much smaller cheque.

PPF is fifteen years, and the clock starts late

The lock-in is 15 years, but measured from the END of the financial year in which the account was opened — which is also why partial withdrawal after 5 financial years means an account opened in February 2017 can first be drawn on in 2023-24. At maturity, extend in blocks of 5 years, and choose with contribution (Form-4, within one year before maturity, 60% withdrawable) — or say nothing and get the default: without contribution, with any amount withdrawable once a year.

Key terms in this chapter

Active Choice: The NPS option under which the subscriber chooses the allocation among asset classes, with equity capped at 75 per cent, corporate debt and government securities at 100 per cent, and alternative investments at 5 per cent.
Atal Pension Yojana: A PFRDA-regulated pension scheme of 2015-16 for the unorganized sector, replacing Swavalamban, open to citizens aged 18 to 40 who are not members of any statutory social security scheme and are not income tax payers.
Auto Choice: The NPS option adopting a life-cycle based approach, beginning equity-heavy in younger years and systematically reducing equity exposure as the subscriber approaches retirement, through four Life Cycle Funds.
Commutation: The exercise of the facility of taking a portion of the annuity corpus in a lumpsum. On retirement an employee may take one third of a superannuation accumulation as commutation, the balance buying an annuity.
Deferred annuity: An annuity whose periodic benefits are scheduled to begin more than 12 months after the date of purchase, generally bought during working years in anticipation of retirement income.
Dormant EPF account: An account with no contributions for three consecutive years. Interest continues to be paid until the employee retires, but that interest is taxable at the employee's slab rate.
Employee covered under the Payment of Gratuity Act: An employee of an organisation employing at least 10 persons on a single day in the preceding 12 months. Gratuity is 15 times last drawn salary times tenure divided by 26, counting a part-year over six months as a full year.
Employees Pension Scheme share: The 8.33 per cent of the employer's contribution directed to the pension scheme, subject to a ceiling of Rs 15,000 monthly salary. It does not accrue interest, and pension is payable only after the age of 58.
Employees Provident Fund: A mandatory savings cum retirement scheme in which the employee contributes 12 per cent of basic pay plus dearness allowance and the employer contributes a matching amount, though the employer's share is split across EPF, EPS, EDLIS and admin charges.
Gratuity: A payment by an employer for services rendered, usually at retirement, requiring a minimum of five years of continuous service except on death or disablement, and depending on last drawn salary and years of service.
Immediate annuity: An annuity whose benefits begin immediately after purchase, generally within 12 months, and most often bought as a single premium annuity.
Inoperative EPF account: An account with no contributions for three years after retirement, or on permanent migration abroad, or on death. No interest accrues, and after seven years the money is transferred to the Senior Citizen Welfare Fund, claimable within 25 years.
Joint annuity: A payout option under which the spouse also receives the annuity for lifetime after the death of the investor.
Laddering: A strategy of buying bonds or fixed deposits maturing at different dates rather than in the same year, which manages interest rate risk by allowing reinvestment in both rising and falling rate scenarios, and manages cash flow for retirement income.
Lifetime annuity without return of purchase price: A payout option under which the annuity is paid for life and stops on death, the principal being retained by the company. The annuity amount is the highest of the options.
Lifetime annuity with return of purchase price: A payout option under which the annuity is paid for life and the purchase price is returned to the nominee on death. The annuity amount is the lowest of the options.
Multiple Scheme Framework: A PFRDA framework for non-government sector subscribers under which pension funds design customised schemes with moderate-risk and high-risk variants, high-risk permitting equity up to 100 per cent, with a minimum vesting period of 15 years.
National Pension System: A contributory social security initiative open to public and private sector employees except the armed forces, and to all citizens voluntarily, with no guaranteed return or principal protection and portability across jobs and locations.
NPS Tier I account: The default mandatory NPS account with conditional and restricted withdrawals, attracting deduction of up to Rs 2 lakh under 80C and 80CCD(1B), with a minimum contribution of Rs 500 and a minimum yearly contribution of Rs 1,000.
NPS Tier II account: The voluntary NPS account with unrestricted withdrawals, requiring Rs 1,000 at activation and Rs 250 for subsequent contributions, and offering deduction under 80C only to government employees.
NPS Vatsalya: A saving cum pension scheme introduced in Budget 2024 for minors below 18, opened and operated by a parent as guardian and subject to all regulations of an NPS Tier 1 account.
Post Office Monthly Income Scheme: A government-sponsored savings scheme paying monthly interest, with a minimum of Rs 1,000 and maximum of Rs 9 lakh in a single account and Rs 15 lakh in a joint account, a five-year term, and interest taxable in the hands of the depositor.
PPF extension with contribution: An extension in blocks of five years chosen by submitting Form-4 within one year before maturity, under which a maximum of 60 per cent of the balance as on the date of extension may be withdrawn, one withdrawal a year.
PPF extension without contribution: The default extension applying where no choice is made, requiring no form, permitting one withdrawal per financial year of any amount up to the total balance.
Pradhan Mantri Vaya Vandana Yojana: A ten-year scheme launched in 2017 and operated solely by LIC for citizens aged 60, paying a pension from Rs 1,000 to Rs 10,000 a month for a purchase price of Rs 1,50,000 to Rs 15,00,000, with the investment returned on maturity. It has not been activated since 31 March 2023.
Public Provident Fund: A voluntary long-term savings product with a 15-year lock-in, open only to Indian residents, with a minimum of Rs 500 and maximum of Rs 1.5 lakh a year, taxed on an Exempt-Exempt-Exempt basis and carrying a floating rate notified quarterly.
Reverse mortgage: An arrangement under which a property owned by an individual is pledged with a financial institution against which a periodic income is paid to the property owner, the loan becoming due only when the last surviving borrower dies or permanently moves out.
Reverse Mortgage Loan Enabled Annuity: An extension of the reverse mortgage scheme ensuring a lifetime pay-out through an annuity bought from an insurance company using the reverse mortgage loan amount, with the annuity received exempt from tax in the hands of the borrower.
Senior Citizens Savings Scheme: A scheme for residents aged 60 and above, 55 on superannuation or VRS, or 50 for defence personnel excluding civilian defence employees, with a maximum deposit of Rs 30 lakhs, a 5-year term extendable once by 3 years, and fully taxable interest.
Systematic Withdrawal Plan: A tax efficient way to generate regular income from mutual funds, withdrawing either a fixed amount or only the capital gains at a chosen frequency. Unlike fixed deposit interest, the value of the fund is reduced by the units withdrawn.
Unified Pension Scheme: An optional scheme under NPS for Central Government employees effective 1 April 2025, assuring 50 per cent of the 12-month average basic pay after 25 years of qualifying service, with a minimum of Rs 10,000 a month after 10 years. The option is final and irrevocable.
Voluntary Provident Fund: Contributions by an employee over and above the mandatory 12 per cent, up to 100 per cent of basic salary and dearness allowance, with no employer match, invested in the EPF account predominantly in government securities.

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Original explanatory writing based on the official NISM workbook for Series X-B, which is published and copyrighted by NISM. Check figures against the current edition at nism.ac.in.

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