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
New Pension Scheme
In this post, I will discuss tax benefits for NPS and the tax treatment of maturity proceeds. I will discuss if it makes sense to invest in NPS now or if you should invest in NPS for the exclusive benefit of Rs 50,000 under Section 80CCD(1B). NPS Tax Benefits (Latest) This part has not been affected by the latest budget. Only contribution to Tier-I NPS account is eligible … [Read more...] about NPS Tax Benefits and Tax Treatment at Maturity (Latest)
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?
In an earlier post, I had discussed how you can open NPS account online using your Aadhaar card. In this post, we will look at how you can contribute your NPS account online. If you have opened your NPS account through a bank or any other Point of Presence (PoP), you can simply make a contribution online from the net-banking portal. Alternatively, if you have opened through a … [Read more...] about How to invest in NPS account online?
In this post, let’s discuss the new developments in National Pension Scheme (NPS). Introduction of Karvy as CRA A CRA does not back-office work and performs administrative and customer service operations. In addition, it interfaces with different entities in NPS system. Earlier, NSDL was the only Central Record-Keeping Agency (CRA). In January 2017, PFRDA allowed Karvy as … [Read more...] about NPS Updates: A new CRA and Shift to eNPS is now allowed
In Union Budget 2016, the Finance Minister proposed a one-time tax exemption to EPF subscribers to switch to NPS. There will be no tax levied for making such a switch from EPF to NPS. Do note the transfer from EPF to NPS is only approved on paper. Many modalities are still being worked out. You can expect opposition from various quarters. However, since the switch is … [Read more...] about EPF vs NPS: Should you switch from EPF to NPS?
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?