NPS Tax Exemption: Two types of accounts can be opened in NPS (National Pension System). One is Tier-1 and the other is! Tier-2. Tax exempted only in Tier-1 account! Available only on investment! Let us know in detail about this pension scheme!
NPS Tax Exemption
NPS Tax Exemption
National Pension System i.e. NPS provides you financial security after retirement! NPS is very useful in making big funds in the long term and arranging pension after retirement. Income tax exemption is also available on investment in NPS!
NPS Tax Exemption
Under this NPS (National Pension System) scheme, you can contribute regularly during your working age. After this, you can withdraw a part of the deposited amount after the age of 60 years! You can get regular income in the form of pension from the remaining amount. You can open two types of accounts in this NOS scheme. Tier-1 and Tier-2.
NPS Tax Exemption
Tier-1 in this pension plan is for retirement savings! While Tier-2 is a voluntary savings account! If someone wants to take advantage of tax exemption through NPS! So for that Tier-1 account is the only option! Tax exemption is not available on Tier-2 account! No tax has to be paid even on withdrawing money from Tier-1 account! The National Pension System was started in January 2004 for government employees. But, in 2009 it was opened for all classes.
How much tax exemption will be available
In the case of NPS (NPS) Tier-1 account, the account holder gets the benefit of tax exemption up to Rs 1.5 lakh under Income Tax Act 80C and up to Rs 50 thousand under 80CCD (1B). In total, you can contribute up to Rs 2 lakh to your NPS (National Pension System) account! And can get the benefit of tax deduction! For a salaried employee, investment made! 10% of the amount or basic pay + DA is considered as deductible amount. For Self Employed Investors, Investment Made! amount or 20% of gross income, whichever is less. The eligible amount is considered for claiming the deduction.
Tax exemption on National Pension System withdrawal
You must understand that the tax treatment is not the same for both the NPS accounts. Withdrawn from NPS Tier-1 account! The entire amount is tax free! Money can be withdrawn from the NPS (National Pension System) Tier-1 account before the age of 60 years only for specific purposes. Up to 25% of the total amount invested was withdrawn! Tax exemption is available only on the amount!
National Pension System
Not more than that. Whereas, if you withdraw money from Tier-2 National Pension Account! So you were fired! Will have to pay tax on the amount! You have to pay income tax according to your tax slab. Therefore, you get tax exemption in this way in NPS (National Pension System)!
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