The NPS for the general public completes 15 years this week. Over the years, the NPS has undergone many changes and become more investor friendly. The Pension Fund Regulatory and Development Authority (PFRDA) has made the scheme more flexible and introduced new features. It has also made it easier to open an NPS account. Here are five reasons why you should invest in it.
Annuity should not be a sore point, because it offers a fixed and assured income for life. It is like a fixed deposit for the rest of your life. An annuity does away with the reinvestment risk and the risk of longevity. At least some part of the retirement portfolio should generate a fixed and assured income, Rahul Bhagat tells Babar Zaidi
Retirement planning: NPS has emerged as one of the most popular tools for retirement planning and investment. Your returns from NPS will decide how much corpus you can accumulate. Let us say you have just turned 40. You have 20 years to accumulate a lump sum in NPS. If you want to earn a Rs 2 lakh pension per month from your NPS investment, here is how much contribution you must make now.
Under Section 80CCD(2), up to 10% of basic salary put in the NPS is tax deductible. There are some tax-free perks, such as a gadget allowance, meal coupons and reimbursement of expenses on books and periodicals that a salaried employee gets. Under Section 17(2), gadgets bought in the name of the company, and given to the employee for personal use, are taxed at only 10% of the value. Sudhir Kaushik of TaxSpanner.com tells readers how they can optimise their tax by rejigging their income and investments.