National Pension System
The National Pension System (NPS) was introduced by the Government of India in 2004 with the primary aim of ensuring pension benefits for government employees post-retirement. In 2009, it was extended to all Indian citizens aged between 18 to 65 years, fostering financial stability in their golden years.
Managed by Experts
Pension funds under NPS are overseen by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring efficient management and security of investments.
Understanding Tier 1 and Tier 2 Accounts
Tier 1 Accounts:
- Designed for long-term savings towards retirement.
- Offers tax benefits under sections 80C, 80CCC, and 80CCD.
- Withdrawals are restricted and subject to conditions like a lock-in period.
Tier 2 Accounts:
- Voluntary savings account with flexibility in withdrawals.
- Minimal tax benefits compared to Tier 1 accounts.
Tax Benefits
Investing in NPS offers significant tax advantages:
- Tax exemption on 25% of Tier 1 contributions.
- Exemption on annuity purchase.
- Up to 40% tax-free corpus withdrawal post-retirement.
Partial Withdrawal Flexibility
NPS allows partial withdrawals under specific conditions:
- Maximum withdrawal of 25% of total contributions.
- Withdrawals permitted after maintaining the Tier 1 account for 10 years or equivalent contributions.
Plan Your Retirement Today
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