8️⃣ things you must know about National Pension Scheme (NPS).
Generation Z & Millennials must read this.
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1️⃣
First and foremost, sole reason for investing in National Pension Scheme:
💡tax saving and there by a place in retirement portfolio.
If you are investing in NPS for any other purpose, you are doing it wrong.
2️⃣
Two types of NPS Account - Tier I & Tier II
👉 Tier I Account: lock in account
👉 Tier II Account: invest and withdraw at will
Tier I Account is the account where all tax deductions are applicable.
Nothing in Tier II. Do not even open, it's useless.
To all NPS Tier II subscribers who have collectively subscribed ~ 3575 Crore:
1) Are you getting any tax benefits by investing in Tier II? No
2) Are you saving for retirement? It can be done through Mutual Funds!
3) Are you getting credit card rewards? It has stopped. 😄
3️⃣
Tax Saving can be done in three sections
80CCD(1)
80CCD(1B)
80CCD(2)
80CCD(1)
This has a limit of 1.5 Lakh and is not over and above 80C Limit.
It is useful only for central government employees. Private Sector Employees and Self Employed have a lot of options for 80C - 1.5L