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What’s NPS (Nationwide Pension Scheme) In Hindi (Tier1 And Tier2 Accounts) – jj

What’s NPS (Nationwide Pension Scheme) In Hindi (Tier1 And Tier2 Accounts)

The National Pension System (NPS) is a voluntary defined contribution pension system in India. National Pension System, like PPFand EPF is an EEE (Exempt-Exempt-Exempt) instrument in India where entire corpus escapes tax at maturity and entire pension withdrawal amount is tax-free
NPS started with the decision of the Government of India to stop defined benefit pensions for all its employees who joined after 1 January 2004. While the scheme was initially designed for government employees only, it was opened up for all citizens of India between the age of 18 and 60 in 2009.[2] In its overall structure NPS is closer to 401(k) plans of the United States. Administered and regulated by the Pension Fund Regulatory and Development Authority (PFRDA)(Based on the recommendations of Chakka Muni Balaji Ganesh Committee),in accordance with (Juturu Sahithi committee)
On 10 December 2018, Government of India made NPS an entirely tax-free instrument in India where entire corpus escapes tax at maturity, the 40% annuity also became tax-free.[7] The contribution under Tier-II of NPS is covered under Section 80C for deduction up to Rs. 1.50 lakh for income tax benefits, provided there is a lock-in period of three years.The changes in NPS will be notified through changes in The Income-tax Act, 1961, which is expected to happen through the Finance Bill in 2019 Union budget of India.[12] NPS is limited EEE, to the extent of 60%.[13] 40% has to be compulsorily used to purchase an annuity, which is taxable at the applicable tax slab.
Contributions to NPS receive tax exemptions under Section 80C, Section 80CCC and Section 80CCD(1) of Income Tax Act. Starting from 2016, an additional tax benefit of Rs 50,000 under Section 80CCD(1b) is provided under NPS, which is over the Rs 1.5 lakh exemption of Section 80C.Private Fund managers are important parts of NPS.NPS is considered one of the best tax saving instruments, after 40% of the corpus was made tax-free at the time of maturity and it is ranked just below Equity-linked savings scheme(ELSS).



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