NPS related queries

1

I am considering contributing to NPS via my employer and had the following questions:

  1. When I retire, suppose the market is bad due to which the total value of my nps account is not satisfactory enough. Can I hold on to it for a few more years for the market to get better and then withdraw? I see that there is an option to stay invested for a few more years, but then I wont be working then and may not be able to keep contributing every month.

  2. Can I just exit from nps midway thru if I am not happy with it? And withdraw whatever money I have gained post retirement (Not immediately). What are the tax implications?

  3. I already have reached my max limit for Sec 80C. Can I still avail Sec 80 CCD for nps?

  4. Where do I view the performance of NPS over the years? To see who has performed the best till now. On what basis do I choose the provider for my nps account?

Please suggest.

Thanks,
Om

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2

First of all there are 2 ways to invest in nps,tier 1 and tier 2. If you are investing through employer you may be investing to tier 1 which you can’t exit midway except extreme conditions. You returns may not be far more linked to equity market as you fear and there are different ways of investing like auto, active modes and there too exposure to equity markets vary according to mode selected and persons age. You can avail additional tax deduction of 50000 in addition to 80C in tier 1. As far as performance is concerned I think tier 1 is best among products for retirement and tier 2 for bond investment with minimal expense ratio. I am investing since 2014 and so far returns are 10.25% annualized on both tier 1 and tier 2. This is the only brief overview given and simple Google search about nps and official website can easily solve your every query

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3

IMO investment via employer is good as mostly they deduct the NPS contribution from your annual package (private cos) and thus that contribution is safe from tax deductions. So, if you are in 30% tax bracket, you are actually saving 30% upfront.

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4
  1. Investment period can be extended till the age of 70, so you will have good 10 years if the market is under performing when you turn 60.
  2. A minimum 6000 Rs is required every financial year. You can check the pre mature withdrawal and exit conditions here https://www.hdfcsec.com/nps-about-withdrawal-and-maturity
  3. Upto 50000 extra tax deductions can be claimed under section 80 CCD 1B, every penny saved is a penny earned
  4. here you can check the latest performance of the funds Top Performing NPS Schemes 2021 | Best National Pension Schemes . My NPS portfolio with HDFC shows an XIRR of 20% which is good enough imho.
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5

Just a correction to point 2 regarding minimum contribution. :slightly_smiling_face:

A Subscriber is required to make initial contribution (minimum of Rs. 500 for Tier I and a minimum of Rs. 1000 for Tier II) at the time of registration.
Subsequently, a Subscriber can make contribution subject to the following conditions:

Tier I:

  1. Minimum amount per contribution - Rs. 500
  2. Minimum contribution per Financial Year - Rs. 1,000
  3. Minimum number of contributions in a Financial Year – one

Over and above the mandated limit of a minimum of one contribution in Tier I, a Subscriber may decide on the frequency of the contributions across the year as per his / her convenience.

Tier II:

Minimum amount per contribution - Rs. 250
No minimum balance required

Cheers

6

There is app of nsdl which shows rhe return %