If you are told that the salary you are getting during the job, you will get a pension after retirement. If you say so, nothing can be better than this. Old age will be spent on the fun. But how is this possible? All you need to do is to open an account in NPS. Now your question will be what is this NPS and how will you get a pension equal to your salary by opening an account in it? The answers to all the questions related to NPS will be found below in easy language.
Question- What is this NPS?
Answer- NPS (Nation Pension System) is a long-term investment plan. This scheme has been started keeping in mind that there should be regular income even after retirement. This is a contributory pension scheme run by the government. After depositing money in NPS, one gets a large lump sum corpus on retirement.
The National Pension Scheme (NPS) was launched in January 2004. Only government employees could invest in this scheme. But in the year 2009, it was opened to all classes of people. That is, everyone can take advantage of this scheme.
Question- Who can open an account in NPS?
Answer- You can open this account in your name or in the name of your wife also. The facility of lumpsum cash and monthly pension is available in this scheme after the age of 60 years. Any Indian citizen who is between 18 to 70 years of age can invest in NPS.
Question- How much and how can I invest in NPS?
Ans- Monthly or yearly investment facility is available in the NPS account. You can start investing in NPS with Rs 1,000 a month. Which you can drive till the age of 70. It is necessary to buy a 40 percent annuity on NPS investment. Whereas after 60 years 60 percent of the lump sum amount can be withdrawn.
Question- What is the benefit of additional tax exemption on investment in NPS?
Ans- By investing in the National Pension System (NPS), you can get the benefit of an additional tax exemption of up to Rs 50,000 annually. Under Section 80CD(1B) of the Income Tax Act, you can get additional tax benefits of 80(c) on the savings made in NPS. That is, if you invest in NPS, then the investment up to Rs 50,000 in it will come under a separate income tax exemption. In this way, you can take advantage of tax exemption on investments up to a total of Rs 2 lakh, including 80C.
Question- Can private employers also save tax by investing in NPS?
Answer- Of course, private job holders can also take advantage of additional tax exemption with a retirement plan by opening an NPS account. Central employees, state government employees, private sector employees, and common citizens can also open accounts in this. An Online (NPS) account can be opened. NPS is run by the Pension Fund Regulatory and Development Authority (PFRDA), which is quite safe. NPS accounts have opened up in a big way in the last few years.
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Question- Where is the NPS account opened?
Answer- Any Indian citizen who is between 18 to 70 years of age can join it. You can open an NPS account in any bank. After maturity, investors can withdraw 60 percent of their money from NPS. That is, after the age of 60, a person can withdraw 60 percent of the total amount deposited in NPS without any tax. There are two types of accounts in NPS. Tier-1 and Tier-2. Funds cannot be withdrawn from Tier 1 till the age of 60 years. Tier-2 NPS account works like a savings account, from where the customer can withdraw money as per his requirement.
Question- How much pension will you get on an investment of 5 thousand rupees?
Answer- For example, if you are 30 years old and you invest Rs 5,000 every month in an NPS account and continue investing for 30 years. That is, till the age of 60 years. If you get a 10 percent return on that investment, then at the age of 60, a total of Rs 1.12 crore will be deposited in your NPS account. As per the rule, on attaining the age of 60 years, you will get a lump sum cash of Rs 45 lakhs. Apart from this, a pension of Rs 45,000 will be available every month. Whereas the investor will invest a total of Rs 18 lakh in 30 years. In this, 10 percent annual return has been estimated, interest rates may fluctuate.
Question- How much will have to be invested for 50 thousand pensions?
Answer- Suppose your age is 35 years now, then you have to invest for the next 25 years i.e. till the age of 60 years. In such a situation, if you invest 15 thousand rupees every month in NPS, then after 25 years from today you will have to invest. Get more than 50 thousand pensions every month. According to the NPS Trust Calculator, by investing 15 thousand every month, you will invest a total of 45 lakh rupees in the next 25 years. Assuming an average return of 10 percent, the total amount after maturity will be Rs 2 crore. After maturity, if you take a 50 percent annuity and consider the annuity rate to be 6 percent, then according to this, the monthly pension becomes Rs 50,171.
