National Pension System: Any citizen between 18 and 60 years of age can invest under the National Pension System. Different benefits are given under its Tier 1 and Tier 2 accounts. This is a tax saving scheme and is operated by PFRDA.
National Pension System: National Pension System (NPS) is a very good option for investment. After investing in it, you can continue your income even after retirement. This is a tax saving scheme and is operated by PFRDA. This scheme was started in the year 2004. In the year 2004, only government employees used to get its benefit. After this, in the year 2009, it was also made available to private sector employees. Two types of accounts are opened in the NPS scheme, Tier 1 and Tier 2.
Any citizen between 18 and 60 years can invest under the National Pension System (NPS). All taxes are covered under Tier 1 account or personal account, while there is no tax benefit in Tier 2. You can open a Tier 2 account only after opening Tier 1. There is no limit on withdrawal and investment in NPS Tier 2. If you are also investing in this, then let us know the features and benefits of both?
Features of NPS Tier 1 and Tier 2
Tier 1 and Tier 2 accounts can be opened under NPS. After opening a Tier 1 account, you can open a Tier 2 account. Tier 1 is a primary pension account. Tier 1 account is a retirement account. This account is opened by the employer. Whereas, Tier 2 is a voluntary account. It is also called an investment account. Any salaried person can start investing in this account. The minimum investment under Tier 1 is Rs 500 and under Tier 2, it is Rs 1000. There is no limit to invest in this. Tax exemption up to Rs 2 lakh can also be claimed under this scheme. In NPS account, you can deactivate the account and close the account anytime.
What is PRAN?
PRAN is given to the subscriber on opening NPS Tier 1 account. It is a permanent unique identification number. Change in job, industry or location does not affect it.
Till what age can one invest?
People between the age of 18 and 65 years can invest in NPS. NPS account can be continued till the age of 70 years. In this, 60 percent amount is returned after 60 years, while it is necessary to buy annuity amount of 40 percent of the investment. This annuity plan is the source of regular income for the investor. NPS gives returns according to the market. By the way, some time ago, 9 percent to 12 percent returns have been received in Tier 1 equity asset class.
