NPS Tier 2: Tax benefit is available in NPS Tier 1 account but not in Tier 2. In such a situation, the question arises that why should invest in Tier-2 account then.
NPS Tier 2: It is necessary to plan from now for regular income after retirement. For this, money can be invested in many options, in which the National Pension System is also one. In this, pension is available every month in addition to a lump sum amount after retirement. Two types of accounts are opened under NPS – Tier 1 and Tier 2. In this, tax benefits are available in Tier 1 account but not in Tier 2. In such a situation, the question arises that why should invest in Tier-2 account then.
Keep in mind that without opening a Tier-1 account, you cannot open a Tier-2 account. NPS Tier-2 is voluntary i.e. if you can open it according to your wish. It can also be opened by an Indian citizen of 18-65 years whose NPS Tier-1 account is active.
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That’s why it is beneficial to open NPS Tier 2
If you want to invest your earnings in such an option, where your money keeps growing and can be withdrawn at the time of need, then NPS Tier-2 account is a better option. You can deposit, withdraw money in this account at any time. Even on the day you have deposited money in it, you can withdraw it on the same day.
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Features of NPS Tier-2 Account
- This is a voluntary account which needs to be a bank account to open.
- To open an account, a minimum contribution of Rs 1000 will have to be made, but there is no minimum balance or any annual contribution obligation.
- You can invest any amount in this in multiples of Rs.250.
- There is no lock-in period in this.
- Tax benefits are not available on the money deposited in it. However, if government employees maintain investment for three years, then they get benefits under section 80C.
- You can easily transfer money from Tier-2 account to Tier-1 account.
- Option to choose different investment pattern from Tier-1 account.
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