Given its features as a retirement product (long lock-in and compulsory annuitisation), investors should have other investments they can fall back on in case they need funds
Now that the National Pension Scheme offers more choices than the Employees Provident Fund, is more transparent and also allows to choose the level of allocation to equities as investors like, should one switch to the NPS?
The raising of the entry age in NPS has opened up an attractive new investment avenue for senior citizens, says Arnav Pandya.
Ask rediffGURU and PF expert Milind Vadjikar your insurance, stocks, mutual fund and personal finance-related questions.
'The adjustments (of tax slabs and standard deduction) will reduce the tax burden for salaried individuals with an income of around Rs 20 lakh by approximately Rs 18,000.' 'For non-salaried individuals with the same income level, the savings will be around Rs 10,000.'
A six-point comparison by Anil Chopra, Group CEO & Director, Bajaj Capital
rediffGURU Vivek Lala answers your income tax and personal finance queries.
Since NPS is used for a long-term goal like retirement, allowing younger investors to have higher exposure to equities will give them a chance to earn higher returns.
Restrict investment to Rs 50,000 for tax benefits, experts tell Sanjay Kumar Singh, but caution that taxation at maturity and compulsory annuities are dampers.
Raise in NPS entry age gives seniors another retirement-saving option but they should invest at least Rs 50,000 to avail of the additional tax benefit scheme provides, reports Sanjay Kumar Singh
'Some part could be used for consumption purposes, and the rest could be used to meet important financial goals.' 'The split can be 30:70 to 50:50, depending on one's situation.'
The National Pension System (NPS) added 21.5 per cent fewer fresh subscribers under the corporate segment in 2023 compared to the preceding year. Government officials and experts attribute it to the higher exemption limit of income tax of Rs 7 lakh announced in the FY24 Budget that no more requires employees under this income bracket to opt for NPS for tax-saving purposes. Data collated from the Ministry of Statistics and Programme Implementation (MoSPI) reveals that the corporate component is voluntary in nature and saw 158,212 new subscribers in 2023 compared to 201,517 during 2022.
Equity-focused schemes may perform better in a bull market, while debt-oriented ones may offer greater stability during volatile periods.
The eighth Budget of Finance Minister Nirmala Sitharaman continued to focus on 'GYAN' (Garib, Youth, Annadata, Nari) to maintain a consistent and coherent strategy initiated over the years in pursuing the government's vision for Viksit Bharat. The approach, characterised by incremental yet impactful steps, aims to create a compounding effect over time.
Implications for capital gains, wealth taxes, and investment strategies require careful consideration, notes Anil Rego, founder and CEO, RightHorizons.
The Unified Pension System (UPS), approved by the Union Cabinet on Saturday, is "fiscally prudent" as it will be funded within the Centre's fiscal projections, according to T V Somanathan, the Cabinet Secretary-designate. Speaking to Business Standard immediately after the Cabinet nod, former finance secretary Somanathan, who headed the committee set up in March 2023 to review the National Pension System (NPS), said the UPS will not postpone pension expenditure as it will be contributory and financed each year.
rediffGURU T S Khurana answers readers' personal income tax queries.
Rationalisation in taxation on the retirement scheme puts significant money in the hands of investors.
Raising equity exposure to 50 per cent in the National Pension Scheme will benefit young investors, provided they can stomach higher volatility.
Use a combination of the two options without which sufficient corpus can't be assured.
Mihir Tanna, Associate Director, S K Patodia & Associates, answers your income tax queries.
'If you invest in a rush at the last moment, you could compromise on selecting the best tax-saving options.'
Why did the political system in the country react to these two decisions of the Modi government in a diametrically opposite manner? asks A K Bhattacharya.
Reduction in the mandatory minimum contribution and extension to invest in the scheme from 60 years to 70 years has made the National Pension Scheme more friendly, says Anil Chopra, Group CEO & Director Bajaj Capital
Union Finance Minister Nirmala Sitharaman on Tuesday said the fiscal deficit for 2024-25 is estimated at 4.9 per cent of GDP.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
Ask rediffGURU and PF expert Milind Vadjikar your insurance, stocks, mutual fund and personal finance-related questions.
The pension fund managers distribute products under the National Pension System.
The government on Tuesday announced withdrawal of the 2 per cent equalisation levy or digital tax on overseas e-commerce supplies.
There are a number of steps taken that will leave more money in the hands of the taxpayers.
These include the reduction in tax rates under the new tax regime, increase in standard deduction, allowing tax collected at source to be adjusted against tax deducted at source from salaries, notes Harsh Roongta.
The 40 per cent exemption benefit is applicable only for employees.
Anil Rego, CEO, Right Horizons, answers your personal income tax queries
Building your Retirement Nidhi is your Karmayoga, ensuring a Golden Yug where you can truly enjoy the fruits of your labour, says Vatsal Ramaiya as he explains how Rs 15,000 per month can help build a Rs 7 crore corpus.
Finance Minister Pranab Mukherjee on Monday said that he proposes to exempt the income of New Pension System Trust from the income tax and any dividend paid to this Trust from Dividend Distribution Tax.
PFRDA has issued these clarifications in response to queries received from pension fund managers seeking clarity on certain clauses of the investment management agreement for private sector.
'Any earnings, regardless of location, will be subject to Indian income tax.'
Rediff.com spoke to registered investment advisors to figure out how best the extra Rs 17,500 saved ever year can be invested to create a decent corpus in the years ahead. This is what they said.
The aggressive life cycle fund will allow equity exposure of up to 75%, up from the current limit of 50%.
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