Sunday , May 19 2024

NPS Double Benefit: You will get monthly pension of Rs 45000 along with additional tax savings, know how

NPS Benefits: There are many misconceptions regarding tax saving among people working in the private sector. Often in the months of February and March, when tax is deducted from salary, people think about where to save tax by investing. Every employee knows about the exemption up to Rs 1.5 lakh under 80C. But there is no correct information about how to save more than this.

Question- Where is exemption available on investment under Section 80C?

Answer- First of all, know that under Section 80C, only investment up to a maximum of Rs 1.5 lakh comes under the exemption limit. Life insurance premium, deferred annuity, contribution to PPF, payment of Unit Linked Insurance Plan (ULIP) premium, payment in respect of non-convertible deferred annuity, investment in National Savings Certificates, payment of children's education fee (tuition fee only) Investments in approved debentures/shares/mutual funds, fixed deposits (FDs) for 5 years or more, repayment of home loan (principal amount only) and investments in Sukanya Samriddhi account come under the purview of 80C.

That means you can get income tax exemption on investment up to a maximum of Rs 1.5 lakh. But apart from this, where else can you invest and save more tax immediately? Let us tell you about it. You must have heard about the National Pension Scheme (NPS). Today we tell you the benefits of investing in it.

Question- Why is it important to invest in NPS to save tax?

Answer- To save tax, you can deposit a maximum of Rs 50,000 in the National Pension System (NPS). Under section 80CD(1B) of the Income Tax Act, you can avail additional tax benefits of 80(C) on savings made in NPS. That is, if you invest in NPS, then investment up to Rs 50 thousand will come under separate income tax exemption. In this way, you can avail tax exemption on investment up to Rs 2 lakh including 80C.

Question- Can people with private jobs also save tax by investing in NPS?

Answer: Yes, you can save your salary from being deducted by opening an NPS account immediately. Not only this, apart from tax, NPS is also an excellent retirement scheme. The National Pension Scheme (NPS) was launched in January 2004. Earlier only government employees could invest in this scheme. But in the year 2009 it was opened to all categories of people. That means everyone can take advantage of this scheme. Now people doing private jobs are also joining this scheme on a large scale.

Question- What is this NPS?

Answer- Apart from tax exemption, if you are looking for better earning even after retirement, then you can open an account in NPS. You can open this account in your name or in your wife's name. In this scheme, lump sum amount and monthly pension facility is available on completion of 60 years of age. This means that after 60 years you will not be dependent on anyone.

Question- How much and how can one invest in NPS?

Answer- You can deposit money in NPS account monthly or annually as per your income. You can start investing in NPS with Rs 1,000 per month, which you can continue till the age of 65 years. It is necessary to buy 40 percent annuity on NPS investment. Whereas after 60 years, 60 percent of the amount can be withdrawn in lump sum.

Understand what is the benefit with an example-

For example, if you are 30 years old and you invest Rs 5,000 every month in an NPS account, and continue investing for 30 years i.e. till the age of 60 years. With a 10% return on that investment, you will have Rs 1.12 crore in your account at the age of 60. As per the rules, as soon as you turn 60, you will get a lump sum cash of Rs 45 lakh. Apart from this, a pension of Rs 45,000 will be given every month. Let us tell you that the investor will invest a total of Rs 18 lakh in 30 years. In this, 10 percent annual return has been estimated, interest rates can go up and down.

Question- What is the age to open NPS account?

Answer- Any Indian citizen whose age is between 18 to 65 years can participate in it. You can open NPS account in any bank. After maturity, investors can withdraw 60 percent of the money from NPS. That means, after the age of 60 years, any person can withdraw 60 percent of the total amount deposited in NPS without any tax. There are two types of accounts in NPS. Tier-1 and Tier-2.

money will be safe

You can open an online (eNPS) account sitting at home. NPS is run by the Pension Fund Regulatory and Development Authority (PFRDA), due to which it is quite safe. In the last few years, NPS accounts have been opened on a large scale.