The NPS scheme tax benefit consists of two parts. The first one is the tax exemption in the year of contribution. You do not pay tax on the NPS contribution. The second one is the tax exemption on the NPS maturity amount. This is the amount you receive at the time of maturity. The taxation of the maturity amount depends on whether you choose to withdraw this amount or continue with a pension. If you choose to withdraw, then the amount is taxable. If you choose to continue with a pension, then the amount will not be taxable. You may have to pay tax on the pension income that you receive in the future.