What are the drawbacks of NPS?
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What are the drawbacks of NPS?
Taxation at the Time of Withdrawal The NPS corpus, which the subscriber can use for buying annuity or for drawing pensions, is taxable, when the schemes matures. 60\% of the investment in the NPS is taxed upon by the Government of India, while 40\% escapes taxation.
Which pension plan is better than NPS?
Best Performing NPS Tier-I Returns 2021 – Scheme E
| Pension Fund Managers | Returns* | |
|---|---|---|
| SBI Pension Fund | 19.78\% | 13.54\% |
| ICICI Pension Fund | 21.44\% | 13.90\% |
| Kotak Mahindra Pension Fund | 20.79\% | 13.96\% |
| LIC Pension Fund | 21.44\% | 13.90\% |
Is NPS risk free?
However, for an investor of the age 60 years and above, the cap is fixed at 50\%. This stabilizes the risk-return equation in the interest of investors, which means the corpus is somewhat safe from the equity market volatility. The earning potential of NPS is higher as compared to other fixed-income schemes.
What is the interest rate of NPS?
The NPS interest rate usually ranges from 9\% to 12\% p.a. NPS contributions toward Tier I account are subject to income tax benefits.
What are the drawbacks of National Pension Scheme (NPS)?
Drawbacks of Investing in National Pension Scheme (NPS) Restricted Exposure to Equities: It is observed that equity market offers better return over a longer period of time which is generally higher as compared to other fixed return instruments.
Is NPS a good investment option?
NPS is a good investment option for public, private, and unorganised sector employees except for the armed forces. The scheme comes under the purview of the Pension Fund Regulatory and Development Authority (PFRDA). The subscriber can then access 60\% of the corpus on attaining 60 years of age.
Why should you invest in the National Pension Scheme?
As more and more people are today working beyond 60 years, the NPS wishes to accommodate to the latest job and working trends. All investments of the NPS scheme are secured through regulations, and hence the subscribers enjoy better returns, which are also safeguarded.
What are the tax implications on NPS?
Tax Implication on NPS: Tax Benefit is also available on investment in NPS. Recent amendment makes NPS partially EEE (exempt-exempt-exempt) scheme, implying the investment, return and mature proceeds (only withdrawal amount) is Tax free.