The government scheme is now widely used by middle-class individuals. Investing in NPS entitles you to a retirement of Rs 5 crore and, once you turn 60, a pension of Rs 1 lakh every month. In addition, you will receive an income tax exemption. We’re going to inform you today how much you need to invest when to become a billionaire after turning sixty.
How is the Net Promoter Score determined?
When the customer achieves retirement age or age 60, at least 40% of the total amount put in the NPS account needs to be converted into an annuity. This sum is received as a pension each month. The remaining sixty percent of the deposit sum can be withdrawn by the customer as a lump sum. Suppose you started investing in this government scheme at the age of 27. In this way, you will invest in NPS till the age of 60 i.e. for a total of 33 years. Now if you invest Rs 2 lakh annually, then by the age of 60 you will invest approximately Rs 66 lakh. Suppose the expected return rate is 10 percent, then the total deposit amount after 33 years will be approximately Rs 5,19,15,841.
Pension exceeding one lakh
If we examine the overall profit in this case, it is as follows: total deposit – total investment = Rs 5,19,15,841 – Rs 65,99,736 = Rs 4,53,16,105. The amount used for pension is now equal to Rs 2,07,66,336 (40 percent of Rs 5,19,15,841). One may remove the remaining sixty percent in one lump sum.
The monthly pension will be
computed as follows if the annuity rate is 6%. Pension annually is Rs 2,07,66,336 * 6%, or Rs 12,45,980. Pension every month is equal to Rs 12,45,980 / 12 = Rs 1,03,832. This implies that you will receive about Rs. 1 lakh, three thousand every month.
Exemption from income taxes
All Tier 1 clients are eligible to deduct up to Rs 1.5 lakh from their contributions’ taxes under Section 80CCE. In addition, following the age of 60, 40 percent of the total deposit amount can be withdrawn at once and it is out of the scope of tax.
Read More: Do this work if Income Tax Refund is getting delayed or stuck
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