This scheme is run by Pension Fund Regulatory and Development Authority (PFRDA) and Central Government. This is a long term investment plan. This is for the people of Retirement. This is a step taken by the government for social security. This scheme encourages people so that people do not have to face any kind of financial problem after retirement. It is given only to Central Government employees. But PFRDA has opened it for all Indian citizens. Section 80C and Section 80CCD. With this it is completely tax free. If you are an NPS account holder, then after retirement you get money every month on a monthly basis.
Who should invest in the NPS?
NPS is a great investment scheme for those who want to hasten their retirement and have a low risk appetite. Regular income is going to provide a lot of help in your retirement age. This is a very good scheme especially for those who are going to take retirement from the private sector. If you invest in it systematically, you will see a massive difference in your life after your retirement. This is a good choice for a salaried person.
Features & Benefits of NPS
There are many benefits and features of NPS, which we are going to talk about below, in which we will give you its benefits. If you are an NPS holder, then you must know about it.
If you invest in NPS, then some part of your money is invested in equity, which means that some part of your money goes in.This scheme does not give guarantee returns in any way but gives you better returns like any other investment. Its effect is visible this year. It gives you a return of 8% to 10% per annum. You can also switch your fund if you are not happy with your returns.
2. Risk Assessment
In this, you are not given a guarantee, but you are given a return of more than 8%, whatever you invest, you have to get its return, but it remains the headache of the investor that in which allocation he is going to put your money. you don’t need to worry much. So you should be completely relaxed, you do not have to take any kind of risk.
3. Tax efficiency
You do not need to pay any kind of tax in this scheme up to 1.5 lakhs. You do not get taxed under section 80C. In this, you have to pay 10% of your salary every month, almost all you can do. But that much is said in its regulations. This limit is 20% of your gross income. You are given a tax deduction of up to 2 lakhs on your money, which is a wonderful scheme in which you can invest. If you are a salaried person, then you must do this, you must open your account in NPS.
4. Withdrawal Rules After Age 60
If you are thinking that you can withdraw your invested money together after retirement, then it is absolutely wrong, you cannot withdraw this money together. 40% of your money will remain in your NPS account only, which will be transferred to your account monthly. Your 40% or 60% is going to be tax free. If you fall in the tax slab, then 20% of your investment will be taxed.
5. Early Withdrawal and Exit rules, Regulation
According to the pension scheme, you have to invest for 60 years. If you are investing continuously for 3 years only then you can withdraw only 25% of your money for some important purpose. These include such as – marriage of children, to pursue higher studies of children, medical conditions and if you are buying a house then only you can withdraw the money.