By investing in NPS, you can secure your future financially. NPS is one of the most preferred investment schemes for building a retirement fund. By investing in this scheme, you can also get exemption on income tax.
Employed people invest in various schemes to secure their future financially. Everyone wants that in old age they do not have to depend on anyone financially. That’s why they invest a part of their salary in various types of savings schemes. The government also runs many schemes, in which a good fund can be deposited by investing for the long term. One such scheme of the government is the National Pension System (NPS). This is one of the most preferred investment schemes for building a retirement fund.
Long time investment
NPS is considered a long time investment. In this scheme, you deposit money during the job, which you get in the form of pension after retirement. The investor gets the money deposited in NPS in two ways. Firstly, you can withdraw a limited part of the deposit amount in one go. At the same time, the second part will be deposited for pension. Annuity will be purchased from this amount. The more money you leave to buy annuity, the more pension you will get after retirement.
Save Rs 200 everyday
This scheme is directly linked to the government and in this scheme you can get a pension of Rs 50,000 after the age of 60 by investing Rs 6000 every month. That is, you have to invest in this scheme by saving Rs 200 daily. The person investing in this scheme also gets exemption on income tax. In NPS, the investor gets exemption under 80C as well as additional income tax exemption of up to Rs 50,000 under 80CCD.
Two types of accounts
There are two types of accounts open in NPS – NPS Tier-1 and NPS Tier-2 (NPS). Tier-1 account is mainly for those people, whose PF is not deposited and they want financial security after retirement. In this, you can open an account by depositing a minimum of Rs.500. In this, you can open an account by depositing a minimum of Rs.500. After retirement, you can withdraw up to 60% of the amount at one go. Annuities are bought from the remaining 40 percent amount.
How to get 50 thousand rupees pension?
Let us understand how much you will have to invest to get a pension of 50 thousand rupees every month. According to the NPS calculator, if someone opens an account in NPS at the age of 24 and starts investing Rs 6,000 every month. That is, every day 200 rupees will have to be saved. In this way, he will invest in this scheme till the age of 60 years. Means he will deposit money in this scheme for a total of 36 years.
In this way, by the age of 60, he will deposit Rs 25,92,000 as investment. Now if we assume a return of 10%, then the total corpus value will be Rs 2,54,50,906. Then NPS buys annuity from maturity income at 40%, then the amount will be Rs 1,01,80,362. Assuming 10% return on investment, he will get a lump sum income of Rs 1,52,70,544. In this way, after the age of 60 years, he will get Rs 50,902 as pension every month.
How much tax exemption is available?
The NPS account holder gets an income tax exemption of up to Rs 1.5 lakh under section 80C and an additional Rs 50,000 under section 80CCD. But you have to pay tax on the income from annuity.
