Finance / Investments
New Pension Scheme: A better way to save tax
Here is brief explanation about New Pension Scheme and how tax can be saved by investing in NPS (New Pension Scheme).
Direct Tax Code (DTC)
, New Pension Scheme could be a better option of investment to save tax. This is because DTC has proposed to include NPS in Section 80C.
You need to open a tire one account for NPS and have to do regular contribution in it till retirement.
The investor can take the 60% of his total pension amount outright at the time of retirement.
He has to invest the rest of 40% amount in the annual plan of any insurance company. Thus the investor gets the regular amount as pension at the monthly or quarterly or half-yearly or annual intervals.
Any person, whose is
between the ages of 18 to 55 years
, can open NPS account. Retirement age is 60 years. The investor can wind up this plan even before his retirement but such has to invest 80% of pension amount in annual plan. He can take only rest of 20% outright.
The investor also has the option to open tire 2 account in which he can do voluntary savings. But for this, you must have tire one account.
The government has set up Pension Fund Regulatory and Development Authority (PFRDA) for the surveillance of NPS. The investor can get the registration form from its website or from Point Of Presence (POP). There are 22 registered POP's in India. A person can take the form or other services from its branches.
Central Recordkeeping Agency allots a permanent retirement account number (PRAN) to the investor after he submits the form in POP. Investor is also allotted a telephone password and an internet password. With the help of these passwords, the investor can get the whole information about his account.
The investor has to
invest minimum Rs. 500 or Rs. 6000 on annual basis
at the time of registration. He has to make contribution al least once in three months. However, there is no restriction on the number of investments done in a year.
The government has presented an attractive scheme by the name of
for the people of lower strata. Under this, the government will deposit Rs. 1000 each year for next 3 years in the NPS account of investor opened in 2010-2011. but this benefit will e available to only those account holders whose minimum contribution is Rs. 1000 or Rs. 12,000 per annum.
PFRDA has authorized seven companies for Pension Fund Management in present, which includes LIC, SBI, UTI, IDFC, ICICI, Reliance and Kotak. Investor also has the option to decide the proportion among equity, loan and balanced fund in which the investment would be invested. But a person can invest a maximum of 50% only in equity fund.
Retirement Planning And Best Places To Retire In India
What is DTC (Direct Tax Code) and tax exemptions available in India after the implementation of DTC?
Read related articles:
Did you like this resource? Share it with your friends and show your love!
Nidhi is a freelance content writer with 5+ years experience. She has great passion to write on valuable topics so as to provide accurate information to her readers. She is also keen to provide employment to all Indians and so posts various job openings too in this website.
299 articles authored by Nidhi
Responses to "New Pension Scheme: A better way to save tax"
No responses found. Be the first to respond...
Notify me by email when others post comments to this article.
Do not include your name, "with regards" etc in the comment. Write detailed comment, relevant to the topic.
No HTML formatting and links to other web sites are allowed.
This is a strictly moderated site. Absolutely no spam allowed.
to fill automatically.
(Will not be published, but
to validate comment)
Type the numbers and letters shown on the left.
Subscribe to Email
Get Jobs by Email
Forum posts by Email
Articles by Email
Awards & Gifts
Last 7 Days
K. Singh ...
Mohammed Shees KC
swaran singh chauhan
ISC Technologies, Kochi - India. Copyright © All Rights Reserved.