NPS Tax Benefits: National Pension System can be a better option for retirement planning. The money deposited under this scheme is given to you in the form of pension after retirement. You can start this scheme with an amount of Rs 1000. By investing in NPS, you can save tax worth lakhs of rupees. According to the information received about this, there are two accounts under NPS. These include Tier 1 and Tier 2. You get the money deposited in Tier 1 account only after retirement. However, you can withdraw the money deposited in Tier 2 account in case of emergency.
How to save tax worth lakhs of rupees?
1. According to the information received from the official website of NPS, you can save tax worth lakhs of rupees by investing in NPS. To avail this tax saving, you must be a member of NPS.
2. By investing in NPS, you can claim tax savings of Rs 1.5 lakh under Income Tax Section 80 CCE. Along with this, a person can claim 10 percent tax savings on income under Income Tax Section 80 CCD (1).
3. On the other hand, if you invest more than Rs 50 thousand, then you can claim tax savings of Rs 1.5 lakh.
4. Apart from this, by investing in NPS Vatsalya Yojana, you can claim tax savings of up to Rs 50,000 under section 80CCD (1B).
5. Government employees can claim tax savings of up to 14 percent.
The risk is reduced
Under NPS, your money is invested in different asset classes. Asset classes like equity, corporate bonds, government bonds etc. Hence the risk is low. However, the returns are affected by market fluctuations.
When can I close my account?
If you want to close your NPS account, then the government has laid down some conditions for this. The lock-in period under NPS can be from 5 years to 10 years. This means that your money remains locked in the NPS account for at least 5 years. However, as soon as this lock-in period ends, you can close the scheme. On the other hand, if you are a salaried person, you will be able to close the NPS account only after 10 years.