NPS: If you invest in National Pension Scheme (NPS) do you know that Tier-2 account can also be used as a savings account.
Tax experts say that NPS investors can easily opt for this option. However, they will not receive checkbook in such account. Withdrawals have to be made online and a fixed fee will have to be paid on each withdrawal.
8 to 11 per cent annual returns
Presently, the savings account is getting less than four per cent interest. At the same time, you can get 8 to 11 percent interest on Tier-2 account of NPS. Looking at the records of many fund houses investing in NPS, it is found that investors have got excellent returns easily.
Also Read: ITR: Just 5 days left to fill income tax returns, easily fill returns with these papers
Tax exemption up to 50 thousand rupees
If you are a government employee, then you can get tax rebate on the amount up to Rs 50,000. This exemption is available under Section 80C of Income Tax. However, to get this exemption it is necessary that the money is kept in lockin for three years. That is, you get this discount only if you do not withdraw the amount deposited for three years.
Can open account online
An NPS Tier-2 account requires that a person’s Tier-1 account be operational. In such a situation a person can easily open online Tier-2 account through Aadhaar and PAN card. The government also provides offline account opening. With an initial investment of Rs 1000, one can open a Tier-2 account.
Preparing for change to make you attractive
Preparations are on to make the National Pension System (NPS) more attractive. In fact, the Pension Fund Regulatory and Development Authority (PFRDA) has decided to place before the government a proposal to exempt the contribution of 14 per cent of the employers under the next budget (NPS) to all categories of shareholders. Under the NPS, the contribution of 14 percent of employers in pension for central government employees has been exempted from April 1, 2019. At present, it is available only to central government employees. PFRDA has demanded to do it for all.
