We all like to be independent. Right after our schooling and college we all strive to get a job and be independent. Some even before completing college goes for some part time work to earning a pocket money or to meet personal expenses without depending others. All this is possible when our blood is young and healthy, but have we ever thought of a life at our older days. Days when we are no more health and young, when need a support from other. Even during those dependent days let’s not put the complete burden on someone else. Let’s invest in National Pension Scheme today to secure our tomorrow.
National Pension Scheme, is a scheme started by our Central Government in the year 2004 with an aim to provide pension for every citizen of India. In the initial stages it was available only for Central Government employees but from 2009 it is made available for all the citizens of the country.
The main eligibility features of NPS are:
* It’s applicable only for Indian citizen
* The age limit is from 18 to 65
* Initial cost of beginning a NPS account is ₹500.
There are mainly two types of NPS accounts
1. Tire One NPS
2. Tire Two NPS
Only those who have a Tire One NPS account can open a Tire Two NPS account.
Difference between Tire One and Tire Two accounts:
1. The minimum amount for tire one is ₹ 500 (min investment of ₹1000 per year is another condition)and for tire two is ₹250. The maximum investment amount is same for both i.e. no limit
2. Tax deduction:
Tire one: Tax deduction upto ₹2 lakh can be claimed.
Tire two: No provisions for tax deduction available
Tire one: Subscribers cannot withdraw until the maturity date or retirement. But after 3 years of opening the account 25%can be withdrawn for certain emergencies. This withdrawal is limited to 3 times before maturity with a gap of 5 years.
Tire two:Subscriber will be able to withdraw their amount as an when required.
Tire one: It is a mandatory account for Central Government employee.
Tire two: Subscriber can open this account on voluntary basis.
After the age of 60 only 60% of the tire one amount can be withdrawn and is tax free. The rest 40% must be invested in an annuity plan of any insurance company, from which we will get pension thereon.The amount invested in NPS will be invested in mainly 3 platforms i.e. stock market, corporate debt instruments and government securities.
There is two options for this investment
1. NPS giving suggestion on how much Percent to invest in which
2. We giving orders on where to invest at what percent.
Various tax exemption are available for NPS account holders.We can make NPS investment through various methods some are Paytm, Google pay, or even through offline ways like through post office and banks.