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How NPS benefits people

NPS Benefits are that it offers returns that are greater than other tax-saving investments. Its been long since this scheme has been in effect.

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How NPS benefits people

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  1. How NPS benefits people

  2. Returns/Interest NPS Benefits are that it offers returns that are greater than other tax-saving investments. Its been long since this scheme has been in effect. It has till now delivered 8-10% returns, annually.

  3. Tax efficiency – NPS tax benefit You can get a deduction up to Rs. 1.5 lakhs that is to be claimed for NPS for your as well as the contribution of the employer. • 80CCD (1) covers the self-contribution, which is a part of Section 80C. The maximum deduction that can be claimed is 10% of the salary. • 80CCD (2) covers the employer’s NPS contribution, which is not a part of Section 80C. This does not benefit the self-employed taxpayers.

  4. Withdrawal Rules After 60 years of age Conflicting to common belief, you cannot withdraw the entire amount of the NPS scheme just after you retire. You need to keep 40% of the amount aside, compulsorily in order to receive pension regularly from a PFRDA-registered insurance firm. The rest 60% of the amount is tax-free.

  5. Early Withdraw and Exit rules As per the NPS scheme, its very important that you keep investing until the age of 60. If you have invested for at least 3 years than you can for certain purposes withdraw up to 25%. The reasons for these withdrawals can be your child’s marriage, higher studies, medical treatment for self or family, buying/ building your own house. You can withdraw about 3 times in 5 years.

  6. Equity Allocation Rules The NPS invests resources into various plans, and the Scheme E of the NPS puts resources into equity. You can designate a limit of half of your speculation to values. There are two alternatives to put resources into – auto choice or active choice decision.

  7. Changing the Scheme or Fund Manager With NPS benefits, you get the provision of changing the fund manager or the pension scheme if you aren’t happy with their performance. This option is available for both the accounts: tier I and tier II.

  8. Thank You

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