Retirement Planning: You can avail 3 big benefits of NPS even before retirement..
If we talk about the NPS scheme, then you get tax exemption on the money invested in it. This tax exemption is also not a minor one. Tax exemption (NPS Scheme) is available on investment in NPS under section 80CCD of Income Tax. It also has two sub-sections - 80CCD(1) and 80CCD(2). Apart from this, 80CCD(1) has another sub-section 80CCD(1B). You can get a tax exemption of Rs 1.5 lakh under 80CCD(1) and Rs 50,000 under 80CCD(1B). Apart from this exemption of Rs 2 lakh (NPS Tax benefits) from 80CCD(2), you can also get more income tax exemption.
Benefit from employer
You get tax exemption on your investment in NPS from the employer. Under this, you can invest up to 10 percent of your basic salary and dearness allowance in NPS and you will get tax exemption on it. On the other hand, if you are a government employee, then this figure can be up to 14 percent for you. Most companies provide NPS facilities. You can invest in NPS through the HR of the company. The good thing is that you will be able to get additional tax exemptions. You will get tax exemption in youth, which means you will save money (benefits of the NPS Scheme), which will be useful for you.
Money will not be spent unnecessarily
When a person gets a job, in the initial days everyone spends money here and there. On the other hand, after a few years, everyone starts understanding (Retirement tips) that to live a better life in old age, it is necessary to invest in youth itself. Although there are many schemes and tools for investment, the biggest advantage of NPS is that you can withdraw the money deposited in it only after retirement. Meaning, unlike other schemes, its lock-in period is not 5 years or 15 years, but up to the age of 60 years. In this way, the investment of the youth (investment tips) remains safe for old age. If there is less lock-in, then many times people use that money to buy a car or house or in a medical emergency, which weakens the security of old age.
Return according to risk
In all investment schemes, you get fixed returns or you get such returns over which you do not have control. If you invest money in NPS, then you can decide how much money you want to invest in the stock market (NPS Scheme rules) and how much money in fixed return tools. There is a capacity to take more risks in youth. In such a situation, you can get more returns by taking more risk, which will help you accumulate a big corpus in the coming days. With increasing age, when you feel that you have to take less risk, then change the investment in NPS (investment in NPS scheme) accordingly, which will benefit you.
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