NPS New Rules: From October 1, there will be many major changes in the National Pension System, which will have a direct impact on you...

Several major changes (NPS New Rules) are set to take place in the National Pension System (NPS) starting October 1st. These changes will have a direct impact on beneficiaries' pockets. These changes aim to make the scheme more convenient. These changes cover everything from withdrawals to investments. Let's discuss them one by one.

NPS New Rules: What will change?
A change has been made in the NPS that will directly benefit investors. This will be good news for beneficiaries who invest in the stock market under the NPS. Under this new change, investors can now invest 100% of their NPS funds in the stock market. However, this will increase the risk of returns.
It will be entirely up to the investor to decide whether to invest 100% of their funds in the market. It's important to note that NPS does not require investing in the stock market.

Similarly, investors will be given a PRAN number under the MSF (Multiple Scheme Framework), which allows them to manage different schemes.

This change also includes a significant change in the NPS exit and withdrawal rules. Beneficiaries used to receive funds directly upon retirement when investing under the NPS. However, now, like the EPF, NPS beneficiaries will be able to withdraw funds earlier in certain situations.

These include education, marriage, and medical emergencies.

In addition, upon retirement, you could previously withdraw 60% of your funds in a lump sum and receive 40% annuity. Now, you will be able to withdraw 80% of your funds in a lump sum, while receiving an annuity on 20%.

However, there will be no change in the tax rules regarding withdrawals. If you withdraw 80% of your funds in a lump sum, 60% will be tax-exempt, while 20% will fall under the income tax slab.

Who can invest in NPS?

People are often confused about who can invest under the NPS. It's worth noting that everyone, from government employees to private employees, can invest in this scheme.

In addition, previously, exit was only possible after retirement. However, now investors will be given the option to exit after 15 years.

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