National Pension System: What makes NPS an ideal option for your retirement

By: |
August 24, 2021 6:15 PM

NPS is a government-initiated product with the sole objective of making retired persons financially self-dependent. It is one of the world's cheapest products and at the same time, gives reasonably good returns.

National Pension System, NPS, additional tax benefit on NPS contribution, 80C benefit, income tax benefits, retirement corpus, same day NAV, SIP, Direct Remittance, D-RemitAlong with tax benefits every financial year, the investors get a pension during their retirement years.

For a smooth and financially safe retirement, industry experts suggest various instrument options starting from mutual funds, real estate, stocks, to NPS, EPF, etc. Although these are the most common retirement instruments, the National Pension System (NPS) is considered one of the best investment tools for retirement planning in India.

Having said that, even though NPS is considered an ideal option for retirement, its low popularity is due to the lower commission on the sale of the product. However, when compared to other assets in the retirement category, NPS almost stands out with some lucrative features.

NPS is a government-initiated product with the sole objective of making retired persons financially self-dependent. It is one of the world’s cheapest products and at the same time, gives reasonably good returns.

Even though all types of investments come with their own merits and demerits, investments in the NPS are mostly focused on the retirement of the investor. Further, as the subscriber is required to invest at least 40 per cent of the accumulated wealth in buying an annuity, the subscriber gets assured pension monthly.

On the other hand, with the NPS, one enjoys full tax exemption up to the limit of Rs 1.5 lakh under Section 80C. Under Sec 80CCD (1B) subscribers also get tax-exemption of up to Rs 50,000. They can also claim deduction under section 80CCD (2), of up to 10 per cent of their basic salary plus dearness allowances, on the employer’s contribution made towards employees’ NPS account.

Hence, along with tax benefits every financial year, the investors get a pension during their retirement years. Therefore, NPS is ideal for self-employed professionals, especially those working in the unorganized sector.

Availing process for eNPS?
To enrol in eNPS, one must register on the e-NPS portal. In the registration process, personal details like KYC, Photo, Signature, and bank details are to be submitted. An individual has two options available – either through entering the details that they have with their bank or through offline Aadhaar XML.

To help subscribers, some companies such as KCRA have taken recent digital initiatives integrated with the UMANG (Unified Mobile Application for New-age Governance) for providing the NPS services. A subscriber just has to provide the PRAN and their password and after authentication, can avail various NPS services on UMANG Website/App.

Some of the NPS services include;
1. Personal Details View
2. Bank Details View – Tier I & Tier II
3. Nominee Details View – Tier I & Tier II
4. Scheme Details – Tier I & Tier II
5. Total Holding – Tier I & Tier II
6. Scheme-wise Holding – Tier I & Tier II
7. Transaction statement on email
8. Recent 5 contributions
9. Update password, update mobile number, email ID, etc.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
110 best-performing mutual funds in the last 5 years
2Your Money: Why liquidity is paramount for a business
3Mutual funds: Dividend yield schemes a good bet now