NPS Scheme Tax Benefits for Individuals
Any individual who is a subscriber of the NPS can claim a tax deduction up to 10% of the gross income under Section 80CCD (1) within the overall ceiling of Rs.1.5 lakh, under section 80CCE.
Exclusive NPS Tax Benefits for subscribers u/s 80CCD(1B)
An additional deduction for the NPS investment up to Rs.50,000 (Tier I account) is exclusively available for the NPS scheme under subsection 80CCD (1B). This is over and above the deduction of Rs.1.5 lakhs available under section 80C of the Income Tax Act,1961.
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National Pension System (NPS) is a voluntary, defined contribution retirement savings system. This retirement scheme is designed to facilitate a regular income post retirement and is based on the unique Permanent Retirement Account Number (PRAN) which is allotted to every individual that applies for the same. The Indian govt. has created this scheme with security of the individual’s income in mind and offers some wonderful benefits for NPS Account holders.
The charges involved for NPS Registration and Payment of Initial contribution are as under:
|Rs. 200 + GST
|upto 0.50% of contribution , subject to Min. Rs.30/- and Max- Rs.25000/-
It is also known as pension account. Withdrawal from this account is restricted till the subscriber attains the age 60 years. Minimum yearly contribution requirement in this account is Rs. 1,000. This account provide Tax Benefit(additional 50,000).
It is a normal investment account. Withdrawal from this account can be done as per the need of the subscriber.
Under this option, subscriber can select the asset allocation among equity, corporate bonds and government securities as per his choice.
Under this option, fraction of funds invested across three asset classes is determined by a pre – defined portfolio which will be based on the age of the subscriber