Skip to main content

NPS - Government-backed retirement instrument

It's a strange coincidence that 'pension' rhymes with 'tension', but the fact is that the two are inversely related. A good pension to support your expenses during retirement will make your twilight years easy and simple to navigate. The earlier you start, the better off you will be. And one of the best retirement savings instruments to begin is the National Pension System (NPS). The NPS has two types of accounts - Tier I and Tier II. In this article we will focus only on Tier I since it is geared primarily towards pension saving. The Tier II account is also a great option for non-retirement and short term saving but we shall discuss that, elsewhere.


A government of India initiative, the NPS Tier I is simple and low cost. Here are 6 reasons why we recommend it to investors:


1. It's open to everyone
All citizens of India (resident or non-resident) between the ages of 18 and 60 can open an NPS account. It is thus available to both employees and self-employed persons.


2. You get a tax break
NPS investments are eligible for tax deductions of up to R1.5 lakh a year under Section 80CCD. Budget 2015 increased this amount by another 50,000. So, you can get a deduction by contributingR200,000 to the NPS or just top up your EPF/PPF/ELSS investments of 1.5 lakh with an NPS contribution of 50,000. Upon maturity at the age of 60, only 40% of your NPS pot is tax free. However, after retirement your other income may be lower (since you are no longer employed/self-employed), allowing you to remain in a low tax slab and save on tax.


3. You get exposure to equity
History has proved time and again that equity is the best asset class for the long term. Few 80C products allow you to gain exposure to it and NPS is one of them. It balances out this exposure (which is capped at 50%) with corporate and government bonds. The result has been stellar returns. The lock-in aspect of the NPS also prevents you from making short sighted investment decisions propelled by greed and/or fear.


4. Its cheap and low-effort
The NPS has one of the lowest cost structures among the investment options available. The Pension Fund Managers who manage your money charge as little as 0.01%. The other charges involved are also low.

You can choose your NPS allocation between equity, corporate debt and government debt funds. However, for those who do not wish to worry about this decision, help is at hand. You can simply pick the auto allocation option under the NPS which will distribute your money based on your age and automatically re-balance as you grow older. Stress, busted!


5 It's easy to contribute to and manage
You can open an NPS account through your nearest Point of Presence Service Provider (PoP-SP) or online through eNSDL. You can also view your balance and manage your account online through the NSDL website. In order to do this, make sure to note down the Permanent Retirement Account Number (PRAN) that will be sent to you.


6. You can extend the tenure till you are 70
After attaining 60 years of age, you have an option to continue investing in NPS up to the age of 70 years under the all-citizens model (which excludes Government employees).




-----------------------------------------------
Invest Rs 1,50,000 and Save Tax under Section 80C. Get Great Returns by Investing in Best Performing ELSS Mutual Funds

Top 10 Tax Saver Mutual Funds to invest in India for 2017

Best 10 ELSS Mutual Funds in India for 2017

1. BNP Paribas Long Term Equity Fund

2. Axis Tax Saver Fund

3. Franklin India TaxShield

4. ICICI Prudential Long Term Equity Fund

5. IDFC Tax Advantage (ELSS) Fund

6. Birla Sun Life Tax Relief 96

7. DSP BlackRock Tax Saver Fund

8. Reliance Tax Saver (ELSS) Fund

9. Religare Tax Plan

10. Birla Sun Life Tax Plan

Invest in Best Performing 2017 Tax Saver Mutual Funds Online

Invest Online

Download Application Forms

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

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

Leave your comment with mail ID and we will answer them

OR

You can write to us at

PrajnaCapital [at] Gmail [dot] Com

OR

Leave a missed Call on 94 8300 8300

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

 

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