Skip to main content

National Pension System

Download Tax Saving Mutual Fund Application Forms

Invest In Tax Saving Mutual Funds Online

Buy Gold Mutual Funds

Leave a missed Call on

94 8300 8300

 

 

 

Retirement planning is a very important part of goal planning. The National Pension Scheme (NPS) also called as New Pension Scheme (NPS) is a pension scheme by the Government, based on a defined contribution by the investor. You can open an account to accumulate a pension corpus by contributing monthly. Your contributions grow based on the investment avenue you choose.



Features of NPS 
1. Any citizen above 18 years can invest in NPS with a minimum investment size of Rs 6000 per year. There is no maximum investment cap.
2. You can open an NPS account by visiting any registered point of purchase (POP) and submitting KYC documents. There are 22 registered POPs across the country, including some banks and financial institutions.
3. Investors can choose from six different fund managers for investment across three styles - low risk, medium risk and high risk. If you choose the high risk investment option, upto 50% of the corpus is invested in equity linked instruments or index funds which mirror the Sensex. You can switch funds without any cost or tax implication.
4. Annual charges in NPS are very low at 0.00009% for fund management.


Structure of the scheme
NPS is available in two forms:
Tier-1 account- This account does not allow premature withdrawal of your retirement savings. Money will be available on maturity only, ie: when you turn 60 years. Typically, if an employer is offering NPS, he will make a contribution in Tier-1 account, equal to your contribution.

Tier-2 account- This account is a voluntary savings facility where you can withdraw your savings whenever you wish. The Government and employers make no contribution to this account. However, to open this account you will need an active Tier I account.

Withdrawal of funds from NPS
Premature withdrawal before you are 60 years: You are required to invest a minimum of 80% of accumulated wealth to purchase a life annuity from a registered life insurer. You are allowed to withdraw the remaining 20% as a lumpsum.

Withdrawal on attaining 60 years: You will have to invest a minimum of 40% of your accumulated amount to purchase a life annuity from a registered life insurer. The remaining amount can be withdrawn as a lumpsum or in a phased manner till you reach the age of 70.

Death of the investor: In case of death of the investor, the nominee will receive 100% of the accumulated wealth in the account.

Taxation
At present, contributions made to Tier 1 account follow "Exempted-Exempted-Taxed". The contribution amount, the appreciation accrued on the contribution and the amount used by the subscriber to buy the annuity are not taxable. However, the amount withdrawn by the investor is taxable. Going forward, as per the Direct Tax Code (DTC), the tax treatment is proposed to follow "Exempted-Exempted-Exempted", similar to PPF - in addition to the existing benefit, the amount withdrawn by the investor after the age of 60 will be exempted from tax. Since the way forward on DTC itself is not very clear at the moment, this may not get sorted out easily, sometime soon.

Benefits of the scheme
1. Better Returns compared to PF: The biggest advantage of NPS compared to other retirement options is the high rate of return which the investor can receive. As NPS provides the option to the investors to decide the manner in which their money is to be invested (ie: in equity market instruments/fixed income instruments/government securities), returns are higher than traditional retirement options like PF. You also have the option of shifting from one fund manager to another, without incurring additional costs helping you invest in the best fund. Since the scheme gives market determined rates, in the long run, this is likely to be a far more viable option. 

2. Safe bet compared to mutual funds: Though investment options like mutual funds give a higher return than NPS, the latter is a safe retirement planning option as there is a cap on the amount which can be invested in equity, ie:50% of funds. Further, the scheme has Government backing and is regulated, which makes it a safe avenue.

3. NPS is, by far, the cheapest pension product with very low annual charges.

4. Contributing to NPS gives you a tax benefit under Sec 80C. You can also claim additional deduction under Sec 80CCD(2) if your employer contributes upto 10% of your basic salary in the scheme.

Pitfalls of the scheme

The most important drawback of the NPS is the inflexibility in withdrawal of funds from Tier-1 account. Though withdrawal is permitted from Tier 2 account, the investor needs to open a Tier-1 account first. This has acted as a deterrent to non-government employees. Further, unlike PF, an investor cannot avail a loan against his NPS holdings.

Though the NPS is an attractive investment option by the Government, it is still not very well-known among the investor community. This is an ideal scheme for conservative and balanced investors who can enjoy better returns compared to other investment options at a low cost and with Government backing.

 

 

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

 

 

Leave a missed Call on 94 8300 8300

 

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

 

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

 

Best Performing Mutual Funds

    1. Largecap Funds             Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds         Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds          Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds   Invest Online

      1. DSP BlackRock MicroCap Fund

2.       Franklin India Smaller Companies

E. Sector Funds          Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds      Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds        Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds         Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now