New Delhi: Everyone wants to be financially secure in life. People who are in government job get a salary at the time of their job and after retirement, they have a pension but the private sector don’t have these facilities. If you work in the private sector and want financial security after retirement, the ‘National Pension Scheme is for you.
This scheme not only gives the benefits of saving income tax but also guarantees a fixed amount every month after retirement from the job. If you invest in this scheme with proper guidance, you can easily arrange a pension of 50 thousand rupees every month.
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What is NPS?
National Pension Scheme is considered a long-term investment. In this, you deposit a little money while doing a job, which you get after retirement. Investors get the money deposited in the National Pension Scheme in two ways.
You can withdraw a limited part of it in one go while the other part will be deposited for the pension from which the annuity will be purchased. The more amount you leave to buy an annuity, the more amount you will get as a pension after retirement.
Types of accounts you can open in NPS
Two types of accounts are opened in the National Pension Scheme. The first type of account is called NPS Tier 1 while the second type of account is known as NPS Tier 2. If one wants to get retirement benefits, a tier-1 account is the only option for him.
Tier 1 account is mainly for those people who do not deposit PF and want financial security after retirement. This type of account i.e. NPS Tier 1 has been prepared according to retirement, in which you can deposit a minimum of ? 500 to open an account.
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Amount
After retirement, you can withdraw up to 60% of the amount in one go. The remaining 40 percent will be used to buy annuities, which ensures a regular source of income in the form of a monthly pension.
Income Tax
In the Tier 1 account of NPS, the benefits of tax exemption are available on both contributions and a revolt 50 tax deduction is available while the entire amount withdrawn from the NPS Tier One account gets tax exemption. However, the tax liability is made on the income earned from these annuities, adding this income to all your other earnings and your slab will be determined.
You will have to pay tax according to the same slab.
Steps to open an NPS account
– Visit the official website of NPS.
– Click on the registration icon.
– Click on registration with the Aadhar option.
– Verify the OTP.
– Fill out all the appropriate options.
– Make payment.
After completing the payment process, your account will be open.
