Your retirement is a crucial aspect when it comes to financial planning. You are constantly seeking options to secure your retirement through various financial instruments. Being a corporate employee, you must plan your retirement wisely.
The Corporate National Pension Scheme (NPS) scheme is one of the best investment options available in India, considering its tax benefits and the potential to earn better returns. It gives you a variety of benefits along with various options in asset allocation patterns. As a long-term investment option, the better returns you earn through NPS can help you plan a stable future for yourself and your family.
Corporate NPS is an extension of the National Pension Scheme. . It is an initiative undertaken by the government to offer everyone a chance to aim for long-term financial security. With Corporate NPS, you can accumulate a corpus of funds on a long-term basis, allowing you to earn a stable income during retirement.
Investing in Corporate NPS helps you build wealth over time. Your Corporate NPS contributions also offer you tax benefits, long-term financial security and a financially stable retirement.
The following eligibility criteria must be adhered to for an individual or entity to subscribe to the Corporate NPS scheme.
You must be an Indian citizen
You should be between 18 years to 60 years of age
The type of entities that can register under or join the NPS Corporate Model for the benefit of their employees are mentioned below.
Entities registered under Co-operative Acts
Entities registered under the Companies Act
State Public Sector Enterprises
Central Public Sector Enterprises
Registered Limited Liability Partnerships
Entities incorporated under Parliament Legislature or State Legislature
Entities incorporated by order of the Central Government or State Government
Societies
Trusts
Proprietorship Concerns
Two kinds of Corporate NPS accounts are open for employees to invest in. You can find a detailed explanation for both as stated below.
The employee can invest through their employer or independently. Essentially, this creates savings for retirement and is non-withdrawable until retirement.
A Tier II account is a voluntary savings account. Those saving for retirement through this account can withdraw their savings whenever required. The withdrawal is subject to their minimum contribution and the account’s balance.
When it comes to withdrawals of Corporate NPS, there are a few rules and regulations laid down by the government. Those rules are listed as follows.
Note: Under special circumstances such as medical emergencies, marriage expenses, education of their children or construction of house, you may be allowed to withdraw up to 25% of the total funds after completion of at least 3 years.