Discover the advantages of the National Pension System (NPS) in this presentation. From tax benefits to EEE status and flexible investment options to regulated management by the PFRDA, learn how NPS empowers individuals to secure their financial future with confidence and foresight. To learn more visit https://www.utirsl.com/why-nps-national-pension-scheme-india
2. The National Pension System (NPS) is a
voluntary, long-term retirement savings
scheme in India. It o ers individuals the
flexibility to choose their own
investment options and pension fund
managers. Participants can also make
regular contributions towards their
retirement corpus. NPS is regulated by
the Pension Fund Regulatory and
Development Authority (PFRDA).
INTRODUCTION
3. TAX BENEFITS
The National Pension System (NPS) o ers Tax-Deduction benefits under three
di erent sections of the Income Tax Act, 1961, namely 80CCD(1), 80CCD(1B), and
80CCD(2). Here are the details based on the search results:
* Section 80CCD(1) allows for a tax deduction of up to Rs. 1.5 lakh for self-
contributions to NPS.
* Section 80CCD(1B) provides an additional deduction of up to Rs. 50,000 for
contributions to NPS.
* Section 80CCD(2) o ers tax benefits specifically for salaried individuals, allowing
them to claim deductions based on a percentage of their salary contributed by the
employer.
These sections of the Income Tax Act provide individuals with significant tax benefits
when contributing to the National Pension System, making it an attractive option for
retirement planning with added tax advantages.
4. FLEXIBILITY AND CONTROL
NPS provides participants with flexibility and
control over their investments. Individuals can
choose between various asset classes such as
equities, corporate bonds, and government
securities. They can also switch between
di erent pension fund managers and
investment options based on their risk appetite
and financial goals. This flexibility empowers
individuals to tailor their retirement savings
strategy according to their preferences.
5. LOW COST STRUCTURE
Compared to other retirement savings
products, NPS has a low cost structure.
The fund management charges are
relatively lower, allowing a larger
portion of the investment to grow over
time. This cost e ciency can have a
significant impact on the overall
retirement corpus, as it minimizes the
erosion of returns due to high fees and
charges.
6. NPS o ers portability and liquidity to its
participants. This means that individuals
can continue their NPS account even if
they change jobs or locations. They can
also make partial withdrawals from
their NPS corpus for specific purposes,
subject to certain conditions. This
feature makes NPS a versatile and
adaptable retirement savings tool.
PORTABILITY AND LIQUIDITY
7. The National Pension System (NPS)
benefits from 'exempt, exempt, exempt'
tax treatment. With complete tax
exemption upon maturity, the scheme
o ers exemption at the time of
investment, accretion, and withdrawal,
aligning it with the tax benefits provided
by the Employees' Provident Fund (EPF)
and Public Provident Fund (PPF).
EEE STATUS
8. The National Pension System (NPS) is
regulated by the Pension Fund
Regulatory and Development Authority
(PFRDA) under the PFRDA Act of 2013
and regulations framed by the
Department of Financial Services and
PFRDA. The regulatory framework
ensures the proper functioning and
oversight of NPS operations,
safeguarding the interests of investors
and ensuring compliance with
established guidelines.
WELL REGULATED
9. CONCLUSION
The National Pension System (NPS) presents a compelling option
for individuals seeking to build a secure retirement fund. With its
tax benefits, flexibility, low cost structure, and portability, NPS
o ers a robust platform for long-term savings. By leveraging
these advantages, individuals can enhance their financial security
and achieve their retirement goals e ectively.
