National Pension System: Features, benefits to know before investing in NPS
Investors India|August 2020
National Pension System (NPS) is a pension plan managed by the Pension Fund Regulatory and Development Authority (PFRDA) and is gaining popularity among investors primarily because of some tax modifications made in the scheme and the returns generated by the pension fund managers.
Sanjeev Puri
National Pension System: Features, benefits to know before investing in NPS

Earlier, the introduction of Section 80 CCD (1B) gave it an edge over other tax-saving investments and later on, making the entire 60 per cent of the corpus on maturity tax-free has made several investors consider NPS as a long-term investment for their retirement needs. The NPS withdrawal on maturity enjoys 100 per cent tax-free status. One of the major advantages of NPS are that it is a low-cost investment option and is a dedicated scheme for post-retirement needs.

Let’s explore some features, how NPS works and see its suitability and the watch-outs:

Anyone between 18 and 60 years can open an NPS account and start saving till retirement. However, Pension Fund Regulatory and Development Authority (PFRDA) had increased the maximum age of joining under NPS - Private Sector i.e. under the All Citizen and Corporate Model from the existing 60 years to 65 years of age. It means anyone between 60 and 65 can now join NPS and continue till age 70.

For those joining after 60, the investments options and the pension fund manager etc remains the same. The normal exit will be after 3 years when the subscriber is allowed to withdraw a maximum of 60 per cent of the corpus while the balance 40 per cent will have to be compulsorily annuatized. It means the subscriber has to purchase pension or annuity from any of the life insurance companies using 40 per cent of the NPS corpus. In case, one decides to exit before completion of three years, only 20 per cent can be withdrawn while pension will be paid on the balance 80 per cent of the corpus.

Diese Geschichte stammt aus der August 2020-Ausgabe von Investors India.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

Diese Geschichte stammt aus der August 2020-Ausgabe von Investors India.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

WEITERE ARTIKEL AUS INVESTORS INDIAAlle anzeigen
Thematic Fund Or Sectoral Fund, Which Fund Suits You?
Investors India

Thematic Fund Or Sectoral Fund, Which Fund Suits You?

A thematic fund is a type of mutual fund that focuses on investing in companies based on specific themes or trends.

time-read
2 Minuten  |
October 2024
Be Kind To Your Kidneys
Investors India

Be Kind To Your Kidneys

The kidney is a vital organ in our body which is four inches long and two and a half inches in width.

time-read
5 Minuten  |
October 2024
Have You Included A Passive Fund In Your Portfolio Yet?
Investors India

Have You Included A Passive Fund In Your Portfolio Yet?

The assets under management (AUM) of passive funds recently crossed the Rs. 10 lakh mark. While a significant portion of this money comes from institutional investors, such as the Employees Provident Fund Organisation (EPFO), these funds are also gaining popularity among retail investors.

time-read
1 min  |
October 2024
Mutual Fund
Investors India

Mutual Fund

1. SEBI allows mutual funds to buy and sell credit default swaps (CDS)

time-read
4 Minuten  |
October 2024
Insurance News
Investors India

Insurance News

1. The finance minister has launched a new NPS scheme named NPS Vatsalya

time-read
1 min  |
October 2024
ASK THE EXPERT
Investors India

ASK THE EXPERT

Dear Sir, I attended your webinar on post-retirement financial planning. As advised by your good self, I invested in NPS after retirement.

time-read
3 Minuten  |
October 2024
Market Mystery: Some Important Investing Lessons from Fund Managers Themselves
Investors India

Market Mystery: Some Important Investing Lessons from Fund Managers Themselves

Mr. Mahesh Patil is the Chief Investment Officer (CIO) of Aditya Birla Sun Life AMC Limited. As the CIO Mahesh oversees INR 3 lakh crore of assets under management.

time-read
6 Minuten  |
October 2024
How to make a cautious entry into equity funds during a bull market
Investors India

How to make a cautious entry into equity funds during a bull market

The number of mutual fund folios has been rising, with flows via the systematic investment plan (SIP) route reaching new highs.

time-read
4 Minuten  |
October 2024
All that you need to know to kickstart your retirement planning process
Investors India

All that you need to know to kickstart your retirement planning process

We all enjoy planning for the future. It’s a good idea to plan ahead of time for anything, from the day’s activities to a vacation.

time-read
5 Minuten  |
October 2024
5 Steps To Achieve Your Financial Goals
Investors India

5 Steps To Achieve Your Financial Goals

From a beach house, a Jaguar, to traveling the world – there are many things in life that we want to accomplish.

time-read
3 Minuten  |
September 2024