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All You Need To Know About National Pension Scheme in India

Jul 07, 2021 Alankit

Do you want to secure a stress-free retirement while enjoying amazing tax advantages in life? If yes, then NPS is the answer to all your prayers regarding your after retirement life concerns. But do you know what NPS stands for?

The NPS (National Pension System) is a pension cum retirement scheme that offers a long-term opportunity to effectively plan your retirement through the regulated market-based return. It’s managed by PFRDA (Pension Fund Regulatory and Development Authority) for citizens of India between 18 and 70 years old (both resident and NRI). One can join the NPS as late and continue to contribute until they are 70 years old.

The NPS is useful for employees, employers, and also the self-employed. While employees and self-employed can subscribe to the NPS independently, employers have the choice to offer NPS or PF to their employees. Employers could also move existing PF benefits of employees to NPS if it’s mutually agreed upon.

There are two types of accounts under the NPS scheme: Tier I and Tier II

Tier I type account is majorly the retirement account which hosts tax benefits under it. The amount invested in it is locked in and can only be availed after retirement at the age of 60. Whereas, Tier II, on the other hand, is limitless and has no restrictions whatsoever; one can easily withdraw money as per one’s need or requirement. So it is highly advisable that you immediately go for NPS scheme registration online.

NPS not just secures your retirement but is also laced with multiple benefits under its wings. It gives you tax benefits during the contribution made before retirement as well as at the time of maturity and withdrawal. Once you go for the NPS online registration and get a PRAN application online, under Tier I NPS, as an individual taxpayer, you can claim a deduction on the contribution of up to Rs. 1.50 Lakhs annually under Section 80C. The benefits just don’t end here! Under Section 80CCD (1B) in Tier I account, you can further claim another Rs. 50,000 over and above the Rs. 1.50 Lakhs offered under Section 80C. Tier II however does not have any such tax deduction benefits attached to it in the NPS scheme.

If you picture a stress-free, happy post-retirement, investing in NPS is the right move for you to build a retirement corpus that allows tax benefits with Alankit. NPS applications can be made online through our official website of Alankit. To open your NPS Account, click here. All you need to do is process your PRAN application form online and leave the rest to us!

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