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

Real Returns in Investing

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 Real Returns in Investing     A Anil Singh (name changed), 44, works with a private company and believes in investing his entire savings in fixed deposits. His financials from the year 2000 till date is given in the table. Anil's savings in FDs gave him an average return of around 8%. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 49.80 lakh. The value of his investment today is around Rs 66.71 lakh. Naveen Singh (name changed), 44, works in a similar profile like Anil. However his expenses were on the higher side. His financials are as in the table. Naveen invested only in equities. The total amount saved over the 174 months (From January 2000 to June 2014) is Rs 38.40 lakh. The v...

Budget 2014 Highlights for Saving

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   The new finance minister Arun Jaitley has just presented his first budget. What measures does the budget contain that will specifically impact savers and investors? Here they are: 1. Housing loans exemption for self-occupied properties increased to Rs2 lakh: Earlier this amount was Rs1.5 lakhs. This move barely keeps pace with the inflation in asset values.   2. Investment limit under 80 (C) increased to Rs1.5 lakh: This is a good move again and offers some relief to taxpayers.   3. IT exemption increased to Rs2.5 lakh, Rs3 lakh for senior citizens. This comes as a minor relief for taxpayers.   4. Annual PPF ceiling to be enhanced to Rs1.5 lakh, from Rs1 lakh: This is in tune with the change in 80C.   5. Long term capital gains tax for debt funds has been rai...

ICICI Prudential MIP 25 - Invest Online

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   ICICI Prudential MIP 25     (CRISIL Rank 2)   This scheme was launched March 2004. Please see the chart below for the one, two, three and five years annualized returns from this scheme. The minimum investment in the scheme is Rs 5,000. The asset allocation of the portfolio is 24% equity, 72% debt and 4% cash equivalent and others. Please see the chart below for the monthly dividends declared by the scheme, on a per unit basis, over the last 5 years.   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 mai...

Franklin India Smaller Companies Fund - Invest Online

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   Franklin India Smaller Companies Fund   While the universe of small-cap stocks in India is vast, there are very few equity funds which take on the task of sifting through this space for good long-term bets. Franklin India Smaller Companies Fund has managed this with aplomb. What we like about this fund is its significant out-performance of its category and benchmark over the last four years, and its ability to moderate portfolio risk despite investing in the riskiest segment of the equity market. This fund's stock selection strategy, like that of Franklin India Prima Fund is focused on finding companies that generate positive cash flows across business cycles. High return on investment and manageable leverage are also filtering criteria. Says R. Janakiraman, fund ma...

How to open a Capital Gains Account?

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   How to open a Capital Gains Account? You can open a capital gains account in an authorized bank. The Government has notified 28 banks which can open the Capital Gains Account on behalf of the Government. You have to apply for opening the account by filling out the required application form (Form A) and submit proof of address, PAN card and photograph. You cannot withdraw funds from a capital gains account using a cheque book or ATM, like you do in your normal savings bank account. There are procedures to be followed to withdraw funds from the capital gains account. Investment in Specified Bonds Section 54EC of Income Act provide that if the seller invests whole or part of capital gains arising from the sale of asset in specified Capital Gains, within a period of six months of the ...
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