National Pension System: Top 5 changes in NPS rules you must know in 2024
NPS (National Pension System) is an easy-to-invest, tax-efficient retirement scheme. Under the NPS scheme, you and your employer both can contribute to build a corpus for your post-retirement years, ensuring your social security and welfare.
The NPS account functions on a defined contribution basis and you need to invest in your pension account until you reach the superannuation age of 60. However, you can continue investing in NPS until 75. While the contribution to NPS is on a defined basis, the maturity amount doesn’t get any defined return or benefit, as the accumulated corpus entirely depends on the performance of underlying assets like equities and bonds.
The value of contributions, achieved investments, accumulation term, and deducted charges all play pivotal roles in determining the eventual benefit of the accumulated pension wealth, according to the Pension Fund Regulatory and Development Authority (PFRDA). In essence, if you aim for a substantial NPS corpus, you must make significant contributions and invest for a specified period.
Also Read: NPS vs PPF: Which retirement plan should you choose?
Experts opine that the higher your investments and the longer the accumulation term, the greater the likelihood of accumulating a good pension corpus. NPS is a market-linked investment instrument that invests money into stocks, bonds and alternative funds. An NPS subscriber gets Rs 1.5 lakh tax deduction benefit (overall limit) under Section 80CCE of the Income-Tax Act. Additionally, the investor gets Rs 50,000 deduction benefit under Section 80CCD(1B) over and above the 80CCE.
Take a look at 5 major NPS changes over the years:
As mentioned earlier, the NPS is a retirement savings tool that allows final withdrawals
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