The National Pension System is a defined contribution retirement savings scheme administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA) that provides old age security to Indian citizens.
New Delhi: Every salaried employee would want to accumulate a fund for his or her stable future, so that a good retirement life can be envisioned. There are numerous types of investments accessible for this purpose. The National Income System (NPS) is one of them.
NPS Pension: Savings Scheme
NPS is a voluntary Pension Scheme of Government of India managed by Pension Fund Regulatory and Development Authority (PFRDA).
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NPS Pension: Great benefits
The National Pension System is a defined contribution retirement savings scheme administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA). The pension cum investment scheme provides old age security to Indian citizens. It brings an attractive long term saving avenue to effectively plan your retirement through safe and regulated market-based return.
NPS Pension: Scheme Details
Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years (as on the date of submission of NPS application) can join NPS. Although, opening multiple NPS accounts for an individual is not allowed under NPS, an Individual can have one account in NPS and another account in Atal Pension Yojna.
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NPS Pension: Income tax exemption
An additional deduction for investment up to Rs 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs 1.5 lakh available under section 80C of Income Tax Act 1961.
NPS Pension: How to get pension of Rs 2 lakh per month
As per a rough NPS calculator estimate, if someone begins depositing Rs 5,000 per month in NPS for at 40 years, he/she will get Rs 1.91 crore. Assuming you start investing at the age of 20, you will receive around Rs 1.91 crore in a lump sum maturity payment and Rs 1.27 crore in annuity value, which will be reinvested in annuities for monthly pension. Therefore, assuming a 6% annual return on an annuity valued at Rs. 1.27 crore, the monthly pension would be Rs. 63,768. The investor will continue to get Rs 63,768 per month from annuity till he/she is alive.
Pension Scheme: Monthly pension of Rs 63,768
If you invest the above stated money i.e Rs 5000 per month from the age of 20 years till retirement, you will get a one-time maturity amount of Rs 1.91 crore to Rs 1.27 crore, wherein a 6 percent calculated return of Rs 1.27 crore would stand at Rs 63,768 per month.
