The National Pension Scheme (NPS) is one of the voluntary schemes individuals can utilize to save a portion of their income for their well-being during retirement.

The Government of India introduced this scheme in 2004, under the Pension Fund Regulatory and Development Authority (PFRDA), and the control of the Ministry of Finance, regulates it.

Initially, when the scheme was introduced in 2004, it was exclusively for government employees. However, in 2009, the government expanded its scope, making it available to all citizens of India.

Features of the National Pension Scheme

• The NPS is open to every individual, regardless of whether they are residents or non-residents of India.
• Individuals investing in the NPS scheme should consistently contribute throughout their working period to accumulate a pension corpus.
• The NPS qualifies for tax benefits under Section 80CCD(1), allowing both employer and employee contributions to be considered up to a specified limit.
• It is a long-term savings plan that aims to provide financial support during your retirement period.

Why NPS

• Developing the habit of saving from the outset.
• Investing with specific goals in mind.
• Accumulating an adequate retirement fund.

• Individuals between the ages of 18 and 60 are eligible to participate.
• Both residents and non-residents can be part of the NPS.
• Central government employees are mandatory participants, while state and other employees can join the scheme voluntarily.

In NPS, there are two types of accounts: Tier 1 and Tier 2.

• It is the primary account
• Citizens in the age group of 18 to 60 can make contributions.
• You need to contribute a minimum amount of ₹ 500.
• The withdrawal of the amount is inflexible, with a lock-in period of 60 years.
• The tax exemption is permitted of ₹ 1,50,000 under sec 80CCD(1) and ₹ 50,000 under sec 80CCD(1B).

• It is the secondary account.
• Individuals who have an account in Tier 1 are eligible to contribute to Tier 2.
• The minimum investment for this is ₹ 1000.
• Withdrawals are flexible, and there is no lock-in period.
• Contributions are not eligible for tax exemption.

NPS Calculator

Use the link below to compute your investments and returns, and strategize your retirement plan seamlessly and effectively.
https://npstrust.org.in/nps-calculator/ – Click Here

NPS is a great choice for individuals seeking a proper structure to build a strong retirement corpus, which helps provide a secure and stable retirement.

To explore Sumopayroll, Sign up!!