The National Pension Scheme was initiated by the Government of India for its employees who joined after 1st April 2004.
It was, then, opened up for all citizens of India between the age of 18 and 65 in 2009. From 2021, the age limit is increased to 70. NRI s can also open NPS account.
On 10 December 2018, it was made an entirely tax-free instrument in India where the entire corpus escapes tax at maturity.
It is a long term investment plan,that enables one to transform regular savings inti wealth for old age with tax benefits.
Provides attractive market linked returns with a low cost associated to it.
Also an additional tax benefit of Rs 50,000 under Section 80CCD(1b) is provided, which is over the Rs 1.5 lakh exemption of Section 80C of the Income tax Act.
How to open NPS account?
1. By physically visiting the bank branch or post office or by applying online on eNPS website with the PAN( Permanent account number) and bank details.
2. NPS subscriber then is issued PRAN ( Permanent retirement account number).
3. First contribution to the scheme is minimum Rs 500.
If a subscriber doesn't contribute to the scheme,in a financial year, the account is freezed. To unfreeze the account, a penalty of Rs 100 for every year of default be paid.
Encourage all to make use of the scheme for current year's savings and for securing life after retirement.
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