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If you are also considering retirement planning then NPS is a good scheme. You get great returns by investing money in it. However, most people believe that investing money in NPS guarantees pension in old age. But do you know that NPS gives you many benefits even in your youth? Keep in mind, these benefits are available separately along with removing the worry of money in old age. So let us know what benefits you get from NPS in youth.
Get additional tax exemptions
If we talk about NPS scheme, then tax exemption is also available on the money invested in it. This tax exemption is also not ordinary. Tax exemption is available on investment in NPS under section 80CCD of Income Tax. It also has two subsections – 80CCD (1) and 80CCD (2). Apart from this, there is another subsection 80CCD (1B) in 80CCD (1). Under 80CCD (1), you can get a tax exemption of Rs 1.5 lakh and under 80CCD (1B) you can get a tax exemption of Rs 50,000. Apart from this exemption of Rs 2 lakh under 80CCD (2), you can get more income tax exemption.
Benefits from the employer
You get tax exemption from the employer on investment in NPS. Under this, you can invest up to 10 percent of your basic salary and dearness allowance in NPS and you will get tax exemption on it. If you are a government employee, then this figure can be up to 14 percent for you. Most companies provide NPS facility. You can invest in NPS through the HR of the company. The good thing is that you will get additional tax exemption. You will get tax exemption in youth, which means your money will be saved, which will be useful for you.
When a person gets a job, in the initial days everyone spends money here and there.
However, after a few years, everyone starts understanding that to live a better life in old age, it is necessary to invest in youth itself. Although there are many schemes and means for investment, but the biggest advantage of NPS is that you can withdraw the money deposited in it only after retirement. This means that its lock-in period is not 5 years or 15 years like other schemes, but till the age of 60 years. In this way, the investment of the youth remains safe for old age. If the lock-in is less, then many times people use that money to buy a car or house or in some medical emergency, due to which the security of old age becomes weak.
Returns relative to risk
In all investment plans, you get fixed returns or such returns over which you have no control. If you invest in NPS, then you can decide for yourself how much money you want to invest in the stock market and how much money to invest in instruments with fixed returns. In youth, a person can take more risk. In such a situation, you can get more returns by taking more risk, which will help you to collect a big fund in the coming days. With increasing age, when you feel that you have to take less risk, then change the investment in NPS accordingly, which will benefit you.