Big Relief with revision in maximum age entry for NPS

Sponsored Links:

Big Relief with revision in maximum age entry for NPS

There is good news for senior citizens in age of 60 to 65 years. Also, Pension Fund Regulatory and Development Authority of India (PFRDAI) change maximum entry age to join NPS from 60 to 65 years. With this revision any individual between age of 18 to 65 years can join NPS. But maximum age for contribution under NPS remains unchanged at 70 years.

Here are few things to know about NPS

This scheme is open to all citizens and provides investment options for creating retirement corpus. You can divert 75 per cent maximum corpus towards equity. So senior citizen can join scheme at age of 65 and till 5 years you can build up your retirement corpus. NPS subscriber also has option to buy annuities with delay of 3 years from 60 to 63. See Opt for FMPs to improve your retirement portfolio

There are two accounts under scheme Tier I and Tier II. Tier I is fixed account for making contribution for retirement with tax benefits and withdrawal restrictions. So Tier II is an optional savings facility. NPS is good retirement product and it provides long term market related savings. Based on asset classes this scheme under NPS system provides good returns. Tier-1 comes with tax benefits and there are no tax saving for Tier-2 accounts.

For Tier-1 account opening minimum contribution for all transaction is Rs 500 and annual contribution is Rs 1,000. But Tier-2 minimum contribution for account opening is Rs 1,000 for all transactions and Rs 250 minimum amount has to invest each time. There is no minimum payment need for financial year for Tier-2 account and you cannot open without tier-1 account.

Minimum contribution required for NPS is Rs. 6,000 per year. But tax benefit will be available only on Rs. 1.5 lakh under Section 80CCD(1) of Income Tax Act, and more Rs. 50,000 will be available under Section 80CCD(2) with total tax benefit of up to Rs. 2 lakh. Thus, Non-resident Indians (NRIs) can also open an NPS account. Also, maturity tenure is not fixed in case of NPS and you can continue till age of 70.

In this regards decision has taken after feedbacks that regulator receives from market. And people in 60s also wanted to build for their retirement through scheme. Other reason PFRDA to take decision is that people are living longer and continue to work beyond 60. Also, people do not want to retire at age of 60.

There are various investment options available to an NPS subscribe. In NPS you have to decide where to invest your money. You can choose from three funds. Such as equity funds, government securities fund and fixed income instruments. You are allowed to invest up to 75 per cent in equity funds. It also offers less risky options with heavy part of fixed income investment.

NPS has come out as scheme for income security of senior citizens. This scheme is open to all citizens of India and offers investment schemes based on risk appetite. You can check How to Open NPS Account Offline. You can check Advantages of an Annuity

Sponsored Links:

Leave a Reply

Your email address will not be published. Required fields are marked *