- Additional tax Benefit up to 50,000 Under 80CCD (Under section 80C 1.5 lakh).
- Flexible Investment Minimum 1000 INR(yearly Contribution) to no limit but (up to 2 lakhs tax exempted ).
- Pay Monthly or yearly On Mobile App You can Increase / Decrease contribution Limits.
- Returns 8-10%
- Lock-in Period Till The Retirement or 60 Years. extended up to 70 Years.
- Withdrawal 60% at Maturity remaining 40% Given on Monthly pensions basis.
How NPS (National Pension System) Scheme Works?
- After Opening Account online or POS. Your Amount invested in the Stock market (equity & debt). this yields high returns.
- Your Amount Managed by Fund managers. they buy /sell stocks to book returns. so your returns will be high because you are investing longterm. After 60 years you get 60% amount by Lumpsum. 40% in the form annuities/pension.
- Any Person in India & NRI* (Self-employed, Govt employees, Private Employees)
- 18-60 Years age Limit
- This Scheme Comes Under EEE status No tax at all But Pensions are taxed. (You should add to income and file return according to slab)
- claim Deductions up to 2 lakhs
- 80CCD(1B) 50,000 and 80C up to 1.5 Lakh
- 80CCD(1) Contributions 10% of basic Salary for the employee. 20% for Self Employed Gross Income with the above limits allowed tax exemption.
- – 80CCD(2) : contribution by employer b. 10% of Basic + DA.
LOCK in period at 60 years Age: you can extend up to 10 Years.
At 60 years of You can withdrawal 60% of amount without any tax. 40% Given Insurance company to provide Pension benefits. (You can choose later).
Premature withdrawal after 3 years allowed, 25% Of Your Contribution 3 Times in your entire life and with 5 Years Gap between withdrawals.
Early withdrawal allowed for Buying Home. Child education marriage critical illness for family self.
- Active Choice: subscriber can choose equity up to 75% or Debt scheme (Corporate or Government Bonds, Just like FD)
- Auto Choice: based on Your Age & Income decided by the Fund manager.
- Subscriber allowed to Change Asset Allocation twice in a Year. Also, change the Fund manager once in a Year.
NPS TIER 1 Account Vs TIER 2 Account
TIER 2 Account Just Like Mutual Fund scheme, No tax Benefit at all.
Its’ a voluntary Tier 1 account Required for This. You can invest and withdraw any Time No limits.
Why we need a Tier 2 Account? To manage all funds (Portfolio at one place).
Why NPS subscribers activate TIER 2 account Becuase they are Already dealing Market Risk.
Getting Tier 2 Account Very easy, visit https://enps.nsdl.com >> NPS>> Registration>>Activate Tier 2(Enter your Pran & pan and follow further steps)
How to Open NPS Account?
Offline: Visit any PoP Point (banks, Govt’s Nodal office), almost 55 Banks Provide NPS Account offline.
You can find it by visiting the NPS website and selecting your area & Pincode.
Submit KYC and pay a minimu subscription
Monthly 250 INR or 500 INR or 1000INR Per year. After registration completed. they will send a welcome Kit which Contains PRAN – Permanent Retirement Account Number. (a 12 digit Number to Operate your account).
- Visit https://enps.nsdl.com/,
- Click National Pension System instead of Atal pension Yojana.
- Then click On Register (NOTE: Your pan Mobile Number should be linked with Aadhaar card)
- It asks you to enter PAN Number & choose Bank (Stock Broker)
- Then Below form will appear complete details your PRAN generates and follow the furhter process. (watch a video on youtube)
How To make NPS contribution Online?
- Visit https://enps.nsdl.com/, and click on NPS and Then Click on Contribution.
- Then Enter Your PRAN Number and Date Of Birth. It will send you OTP your Mobile or email.
- Login & Pay the contribution monthly Once or Yearly Once.
- You can also Pay the amount by NPS Trust app available on Google Pay.
NPS Trust Portal Login Benefits/features
- Update FATCA details
- Update Email ID/Mobile number
- Reprint PRAN Card
- Change in Scheme Preference
- Tier II Withdrawal
- View Account Details/Transaction Statement
NPS VS PPF VS ELSS VS FD
|NPS||8% to 10%||Till retirement||High (Long term *)||EEE|
|ELSS||12% to 15%)||3||Very high (market risk*)||EEE|
|FD||7% to 9%||5||No Risk||ETE|
Note: we compared all saving schemes here.
In the case of FD: ETE: Earrings / Intrest are taxed. you should add this to Interest income from other sources. computer your tax accordingly in ITR.