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?
New Pension Scheme
Over the year and a half, NPS has attracted many new investors to its fold because of exclusive tax benefit of Rs 50,000 under Section 80CCD(1). Union Budget 2016 made the withdrawal at the time of retirement more tax friendly. Do you know these tax benefits are only limited to NPS Tier I account? What about investment in Tier II NPS account? Well, not many bother. Though … [Read more...] about Should you invest in NPS Tier II Account?
In order to protect retirees from market volatility, PFRDA, the pension regulator, has come out with new guidelines stating that your NPS investments will be monetized if you do not withdraw or purchase annuity at the time of retirement. Before I discuss this new circular by PFRDA, let’s do a recap of exit rules for NPS. Exit from NPS at the time of Retirement At the time … [Read more...] about NPS Subscribers nearing Retirement: Be aware of monetization rules
NPS has attracted a lot of interest from investors due to favorable taxation announcements in the past few years. However, a number of investors have a few misconceptions about NPS structure. Many investors think the NPS provides annuity. But that’s not completely true. You invest in NPS to accumulate corpus. You use the corpus (at least 40%) to purchase annuity at the time of … [Read more...] about Annuity options under NPS
NPS (National Pension System) has been getting better from taxation standpoint with each Union Budget. Last year, investors got additional tax benefit of Rs 50,000 under Section 80CCD (1B). This year, 40% of maturity corpus at the time of retirement was made exempt from income tax. There has been a lot of buzz among tax-payers this year about investing in NPS. If you have … [Read more...] about How to open NPS account online using Aadhaar Card?
The latest Union Budget has made significant tax concessions for withdrawal from NPS corpus at the time of retirement. In this post, I will discuss these budget proposals pertaining to NPS. Please understand this is my initial understanding of the budget proposal. I will update the post as I develop better clarity. Up to 40% of accumulated corpus exempt from Income Tax In … [Read more...] about 40% of NPS maturity amount is exempt from Income Tax
In the last budget, the Finance Minister offered an additional tax benefit of Rs 50,000 per year for investment in NPS. This tax benefit is available exclusively to NPS under Section 80CCD (1B). Moreover, this benefit of Rs 50,000 is over and above Rs 1.5 lacs under Section 80C. For this additional tax benefit, NPS has caught the attention of many investors. Should I invest … [Read more...] about Should you invest Rs 50,000 in NPS for the extra tax benefit?
The greatest strength of NPS (New Pension Scheme) is its low cost structure. As per existing guidelines, investment management fee or fund management fee is capped at 0.01% p.a. The low management fee is partly due to low bidding by pension fund managers in order to shore up their asset under management (AUM). The other reason is that NPS corpus (especially the equity fund) has … [Read more...] about NPS likely to get more expensive
With limited withdrawal allowed before retirement, NPS is a true retirement product. The Government has also pushed NPS through greater tax incentives. Some of the benefits are exclusive to NPS investments. You can read about National Pension Scheme in detail here. NPS exit and withdrawal rules have been revised after this article was posted. You can read about revised exit and … [Read more...] about NPS Tax Benefits and Tax Treatment on maturity
In this post, let's look at the latest exit and withdrawal rules for Government Sector NPS (for central and state government employees) and All Citizens model/Corporate Sector NPS (for private sector employees/self-employed). Latest NPS Withdrawal Rules Partial withdrawal up to 25% of own contribution (excluding the contribution from the employer) is allowed after 10 3 … [Read more...] about Latest NPS Withdrawal and Exit Rules (2018)