Tax incentives for NPS have gotten better and better over the last few years. In 2018, NPS almost became an EEE product. Almost. The entire lump sum withdrawal at the time of retirement (60 years) became exempt from tax. The same was notified in Union Budget 2019 too. In my previous posts on NPS, I have solely focussed on if and how much you must invest in NPS. Here is my … [Read more...] about NPS: Your Employer offers to contribute, Should you sign up?
National pension scheme
The Government of India has brought about a few important changes to NPS (National Pension Scheme). All the changes are beneficial for the NPS investors. Some of the changes are only for the Central Government Employees while the others apply to all the NPS subscribers. Let’s go through the changes in detail. Change # 1 (Taxation of NPS Maturity proceeds) This change … [Read more...] about Good News: Lumpsum withdrawal from NPS is now exempt from tax
PFRDA increased the maximum age of joining under National Pension System from 60 to 65 years. Here is the link to the circular. The joining age has been increased for All Citizens model (including Corporate Sector NPS). No such provision for Government sector NPS. Please understand investors were already allowed to continue their existing NPS accounts until the age of 70. It … [Read more...] about If you are a Senior Citizen, should you invest in NPS?
Have you been investing in NPS? If not, I am not sure there are some reasons for staying away from NPS. Some of the common (and most of them valid too) reasons for not investing in NPS are: #1 Your money is locked in until the age of 60 Yes, you can’t access your money until the age of 60 or you can access only a small portion of it before 60. That is a problem. But all … [Read more...] about What are the problems in NPS? Why investors stay away?
In this post, I will discuss an aspect of NPS about which I have received quite a few queries. What to do if you have two NPS accounts? Based on the number of queries that I receive on the issue, having two NPS accounts is not very uncommon. They got one through their employer. Subsequently, when they read about exclusive tax benefit of Rs 50,000 for investment in NPS Tier-I … [Read more...] about What to do if you have two NPS accounts? How to close the second NPS account?
PFRDA, in its circular dated November 4, 2016, added two more options of life cycle funds under Auto Choice option viz. Aggressive Life Cycle Fund and Conservative Life Fund. These options are in addition to Existing life cycle fund (Moderate life cycle fund or LC 50), which shall still be the default fund. Therefore, investors will have three options to choose under Auto … [Read more...] about NPS updates: Two New Life Cycle Funds and a New Asset Class
A subscriber can exit NPS due to following reasons: Superannuation (or retirement) Turning 60 (All Citizens model) Premature Exit Death How do you exit NPS? Are you aware of the exit process? PFRDA came out with a circular in November 2015 stating that all withdrawals or exit from NPS shall be made online. However, the process is completely online only for … [Read more...] about How to exit NPS?
You recently quit your Government job. While in your job, you had to make mandatory contributions to your NPS account. Everything was on auto-pilot mode. Now that you have quit your job, you do not know how to make further contributions to NPS. Earlier, the contributions were automatic. Now you need to figure out a way to continue contributions. If you can’t figure out an easy … [Read more...] about How to shift NPS Account?
Should I invest in NPS? Or Should I invest Rs 50,000 in NPS for exclusive tax benefit under Section 80CCD(1B) and no more? This is a question that worries many of us in the last quarter of financial year. What should you do? Taxation and withdrawal rules have witnessed a massive change in the last few years. How do these changes affect your decision to invest in NPS? From … [Read more...] about Should you invest in NPS?
When you are investing, the cost of investing may impact your returns i.e. if the cost of investing is too high, it will compromise your returns. We have already seen how a small intermediary commission in regular plans of mutual funds can affect performance as compared to direct plans of MF schemes. National Pension scheme (NPS) has attracted a lot of attention in the latest … [Read more...] about What are the various charges incurred while investing in NPS?