Tier 1 account is the basic form of NPS. At the same time there are many types such as NPS (State Government), NPS (Central Government), NPS (Corporate) and NPS (Citizen).
National Pension System: Generally people prepare a lot about their future, so that they do not face any financial problem after retirement. There are many schemes of the central government regarding retirement. One of these is NPS, which is a very popular pension scheme of the Centre. In this, the investor gets the benefit of both tax saving and retirement planning.Also Read: Public Sector Banks contribution for employee pensions under N
Not only this, there is also an exemption under section 80C of Income Tax on investing in it. By investing in this, not only can you do retirement planning but you can also save tax up to Rs 1,50,000 in a year. Its most important thing is that government as well as private sector employees can invest in it.Also Read: Aadhaar Services: A great feature of UIDAI! These services related to Aadhar will be available without internet through just one SMS.
Who can open account
Tier 1 account is the basic form of NPS. At the same time there are many types such as NPS (State Government), NPS (Central Government), NPS (Corporate) and NPS (Citizen). They all work in different ways but some of these laws are common to all. Anyone who is 18 to 65 years old can open his account in it. The minimum amount to invest in this is only Rs 1000.Also Read: Before giving a check in the bank, know this new rule of RBI, otherwise you may have to face huge loss
Specialties and tax exemption
On investing in this, a deduction of Rs 50,000 is available in tax under section 80CCD(1B). At the same time, a person can claim tax deduction up to 20 percent of his salary contribution in his NPS. The special thing is that the returns received under this are exempted from tax. This account matures as soon as the investor retires or completes 60 years. After maturity, you can withdraw up to 60 percent of the amount deposited in the account. While the remaining 40 per cent is used to buy an annuity plan.Also Read: Train ticket booking made easy with IRCTC iPay, refund will be given immediately on cancellation, know the way here
Like PPF (Public Provident Fund), EPF (Employee Provident Fund), VPF (Voluntary Provident Fund) returns in NPS are not fixed. It is completely market driven and depends on the performance of your fund managers. At the same time, it also depends on the asset mix you choose.