NPS Scheme: Investing in National Pension System (NPS) is a great option for common citizens to ensure regular income in old age. This scheme was started in the year 2004 and earlier only government employees could invest in it but in 2009 it was opened to all. Under this scheme, contributions are made till retirement and then at the time of retirement i.e. on attaining the age of 60 years, a part of the accumulated amount can be withdrawn and the remaining amount can be earned as regular pension. Can get. There are many advantages of investing in NPS such as you can get higher returns on investment than PPF or FD. Similarly, there are other benefits of investing under NPS.
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Five big advantages of investing under NPS
- Higher returns than investing in FD-PPF: One can get higher returns under NPS than under PPF (Public Provident Fund) and FD (Fixed Deposit).
- Tax relief: If you are an employee of a company, then you can avail deduction of up to Rs 1.5 lakh under section 80 CCD (1) on your and your company’s contribution to NPS. Under this section, maximum deduction of 10 percent of the salary can be taken. However, self-employed taxpayers can get maximum deduction of 20 per cent of the gross income. Apart from this, you can get an additional claim of up to Rs 50,000, that is, you can get a maximum deduction of Rs 2 lakh on investment under NPS.
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- Tax exemption to the company also: It is not that only the employee of the company gets tax relief on the contribution under NPS, but the company also gets the benefit. The company can claim tax exemption under business expenses on the amount it contributes.
- Flexibility: There are many investment options and option to choose pension fund under NPS. Subscribers can choose any option and fund to enhance their capital. Apart from this, how much money in the account has increased, it can be tracked. If the money is not growing as expected, then there is also an option or the option of changing the fund manager.
- Low cost: NPS is regulated by PFRDA in a transparent manner. Under this, the account maintenance cost is lowest as compared to other pension products. This expense matters a lot while planning investments for the long term such as retirement as it can eat up a huge chunk of capital.
(Source: National Pension System Trust and Cleartax)
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