Long-term investment, compounding and disciplined investment moves are some major points of interest in the financial market. All these elements get combined when the discussion is regarding building a tax saving plan or about retirement planning. In India, currently, the National Pension Scheme (NPS) is considered as one of the best investments under tax saving schemes.
The scheme, spearheaded by the Central Government in early 2004, is now known as one of the best tax saving schemes. Investors are actively leveraging the government-funded initiative as a long-term investment tool and more importantly, as a part of their tax saving plan. However, before any investment, a deep understanding of the market and analyses related to investments and the market are required.
The NPS is a long-term investment tool, targeting a group of investors or an individual, who are looking to build a retirement corpus. The plan becomes even more convenient when availed through the Finserv MARKETS, which offers increased transparency and seamlessness in processing. You can simply upload your documents online and then access them from anywhere at all.
How does the NPS work?
NPS works like a defined contribution plan. This means that as a subscriber, an investor can make an annual contribution plan for the duration of their employment period. If they require continuity of the scheme, they can choose to invest in the scheme until they turn 60 years old. The NPS also permit subscribers to invest in the tax saving plan from the age of 18 years. Through platforms like Finserv MARKETS, investors can control the entire process online straight from registration to calculating the estimated risk. Considered as one of the best investments plan for investors, the NPS enables subscribers to avail a deduction of Rs.1.5 lakh, under section 80C and additional tax deduction benefits of Rs.50,000 under section 80CCD. If an investor’s income falls under the highest tax bracket, tax savings of Rs. 15,600 every year will be ensured under NPS. Unlike other tax saving schemes, such as the public provident fund (PPF), where everyone is assured of a predetermined interest rate, NPS comes with an option to choose between accounts as well as nominees.
NPS falls under top ten best investment options in India with low-high risk, limited liquidity, market-linked returns, and tenure of 60 minus entry age. By subscribing through Finserv MARKETS, an investor can avail transparency in operations and always stay updated on their corpus. Subscribing to NPS via Finserv MARKETS is easy enough. Just upload your documents once and get started on building your retirement corpus today.
The NPS does not guarantee a fixed pension amount
The pension scheme is a market-linked instrument and thus, does not provide a fixed pension amount since returns are completely dependent on the market’s performance.
“There is no proposal to replace the NPS, with old pension scheme in respect of Central Government employees recruited on or after 01.01.2004. Due to rising and unsustainable pension bill, the Government had made a conscious move to shift from the defined benefit, pay-as-you-go pension scheme to defined contribution pension scheme now called as National Pension System (NPS). The transition also helped in freeing the limited resources of the Government for more productive and socio-economic sectoral development,” said Anurag Thakur, Minister of State for Finance & Corporate Affairs.
NPS permits subscribers to put their pension corpus across government bonds, equities and corporate securities. Recently, the government announced that it will increase the contribution of Central Government employees from 10% to 14%. This will enable central government employees to channel additional funds for tax benefits under Section 80C. However, the investment will need to be locked in for a minimum of three years. Last week, the government also increased tax-free portion of the pension scheme to 60% from 40%.
Finserv MARKETS offers a platform for getting started on the NPS scheme with full transparency and various tax benefits. Under this scheme, subscribers can choose between a host of investment options as well as fund managers. Additionally, Finserv MARKETS provides benefits of switching between fund managers and investment plans. Investors can easily track their NPS, despite of change in job or city; and portability becomes easier with online tracking of the best investments.
Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere!