What is Nation Pension System?
NPS began with the Government of India's decision to discontinue defined benefit pensions for all its employees who joined after 1 January 2004. While the scheme was initially only designed for government employees, in 2009 it was opened up for all Indian citizens between the ages of 18 and 60. NPS is closer to 401(k) plans of the United States in its overall structure. The Pension Fund Regulatory and Development Authority (PFRDA) (Based on the recommendations of the Chakka Muni Balaji Ganesh Committee) is administered and controlled in accordance with (Juturu Sahithi Committee).
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| The National Pension System (NPS) |
The changes in NPS will be notified through changes in The Income Tax Act, 1961, which is expected to take place through the Finance Bill in India's 2019 Union budget. NPS is limited to 60 percent EEE. 40 percent must be used compulsorily to buy an annuity that is taxable on the current tax slab.
NPS contributions are exempted from tax under Section 80C, Section 80CCC and Section 80CCD of the Income Tax Act. Starting in 2016, Section 80CCD(1b) provides an extra tax advantage of Rs 50,000 under NPS, which exceeds Rs 1.5 lakh exemption of Section 80C.
Private Fund Managers are significant parts of the NPS. NPS is regarded as the best tax saving instrument and ranked just below the Equity-linked Savings Scheme (ELSS).
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| National Pension Scheme System (NPS) |
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| National Pension Scheme System (NPS) |
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| National Pension Scheme System (NPS) |
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| National Pension Scheme System (NPS) |
