All you need to know about National Pension System (NPS) and its tax benefits

 

Financial planning is one of the most essential steps to meet one’s life goals. A strong financial plan can help us manage our income, expenses, and investments, and allows us to build the life that we aspire for, taking into consideration fluctuating expenses, unexpected exigencies, and economic downturns. But how does one formulate a strategy where risks are controlled and reasonable returns are ensured for a worry-free future? Interestingly, making small changes to the way we manage money app ..


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National Pension System (NPS) is an unparalleled tax-saving investment option that substantially reduces your tax liability. As an investment cum pension plan launched by the Indian Government, any Indian citizen from the age group of 18 years to 70 years, as well as employees from the public, private, and the unorganised sectors, except those working in the Armed Forces, can open an NPS account. While NPS has been primarily designed to provide retirement security through attractive investment o ..


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How to invest in an NPS account
NPS, in short, are low-cost pension plans wherein an individual can invest in a mix of equity, government debt, alternate investment funds, and corporate debt, with allocation to Equity capped at 75% till the age of 50 after which, it reduces steadily while % allocation to debt increases. NPS comes with a lot of flexibility regarding deposits and withdrawals, where you can opt for two kinds of account preferences: NPS Tier 1 and Tier 2. Both th ..


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Any individual can participate in the NPS under 3 models :
All India Citizens (including NRIs) between the age 18 and 70 years can open an NPS account.
Corporate Model where employer/employee in the organised sector contributes to the employee’s Tier 1 account.
Central / State Government Model which guides mandatory participation of government employees who joined employment on or after 1 Jan 2004.Breaking the myth around withdrawal a ..


Read more at:
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