Major Changes in National Pension Scheme (NPS) : You Can Now Invest in this Scheme at the Age of 60 to 65 Years

Nowadays, everyone knows about NPS. Especially if you are serious about saving, then you must have heard National Pension System or NPS. Investing in it secures retirement and makes it easier to get monthly pension. The NPS scheme holds immense value for anyone who works in the private sector and requires a regular pension after retirement. The scheme is portable across jobs and locations, with tax benefits under Section 80C and Section 80CCD. Recently, pension regulator Pension Fund Regulatory and Development Authority (PFRDA) has allowed some changes in NPS rules.

What is National Pension Scheme (NPS)?

The National Pension Scheme (NPS) is a social security initiative by the Central Government. This pension programme is open to employees from the public, private and even the unorganised sectors, except those from the armed forces. Earlier, the NPS scheme covered only Central Government employees. Central Government employees joining on or after 01-01- 2004 are mandatorily covered under the NPS. But, now the Pension Funds Regulatory and Development Authority (PFRDA), has made it open to all the citizens of India on a voluntary basis.

The scheme encourages people to invest in a pension account at regular intervals during the course of their employment. After retirement, the subscribers can take out a certain percentage of the corpus. As an NPS account holder, you will receive the remaining amount as a monthly pension post your retirement. The special thing about this investment plan is that it not only gives you profit after retirement, but It also exempts you from tax. Also, the return on investment will be very high. Another feature is that the huge amount you get after maturity is tax-free.

New Rules of NPS

Now the scheme has been enhanced so that you can continue to invest in it not only during your employment but also after retirement. As per the new rules related to this scheme, those who have retired and want to continue it, can keep it. The Pension Funds Regulatory and Development Authority (PFRDA), which administers the scheme, has made several changes to improve it. After the new changes, you can now invest in this scheme even at the age of 60 to 65 years.

Provision for 60% Withdrawal

• Full funds cannot be withdrawn after investing under this scheme. 40 percent deposit is mandatory for depositors. which is used for annuities.
• Pension is paid out of this amount after retirement of the depositor. If the depositor wants, he can withdraw the 60 percent amount once. Some people do not want to withdraw this amount even after retirement. It is now allowed.

How Much Tax Exemption will There Be?

• Depositors also get tax relief by making deposits in this scheme. As per the tax rules, depositors are eligible for tax exemption under Sections 80CCD(1), 80CCD(1B), and 80CCD(2).
• Talking about section 80CCD(1B), by investing in this scheme, one can get additional deduction up to 50 thousand. This exemption is available along with the exemption available under section 80C.

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