Payment of New Pension System (NPS) contribution in a single Installment

For the convenience of the subscribers, and help popularise the NPS, it has been decided that NPS subscribers

will, henceforth, have the option to pay their yearly NPS subscriptions in a single installment (as against the stipulated minimum 4 installments in a year) on payment of fee applicable to one installment.

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Now pay your contribution for New Pension System (NPS) through Electronic Clearance System (ECS):

The NPS provides Electronic Clearing Service (ECS) facility to its subscribers. This will facilitate the subscriber to electronically pay NPS contribution from their respective bank accounts. To avail this facility, subscriber is required to submit the ECS form to any of the NPS registered Point of Presence (POP)/ Point of Presence‐Service Provider (POP‐SP). The subscriber will provide details of bank account in the ECS Mandate form prescribed by respective POP. Once the ECS request is accepted the subscriber contribution amount will be debited from their respective account on the specified date.

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Tax Saving and other Investment option in India Ready Reckoner

I wish All my readers a Very Happy new Year. Since financial year end is approaching fast, we have very less to to invest in tax savings instruments. Please find comparison of various investment options in the form of a ready reckoner.

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How to open Online NPS account with ICICIdirect.com and FAQ's

Pension Fund Regulatory and Development Authority (PFRDA) was established by the Government of India on August 23, 2003 to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds and for matters connected therewith or incidental thereto.

The NPS is a new vouluntary contributory pension scheme introduced by the Central Government . Under the new pension system , individuals can open a personal retirement account and can accumulate a pension corpus during their work life to meet financial needs post retirement. These contributions would grow and accumulate over the years, depending on the returns earned on the investment made. When the person retires, he will be able to use these savings to take care of the needs and expenses of his family during old age.The subscribers may use the accumulated pension wealth under the scheme to purchase a life annuity from a life insurance company. Alternatively, depending on the age of the subscriber, a part of the wealth may be withdrawn as lump-sum.

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Open NPS account online with ICICIdirect.com

PFRDA has now started using technology to distribute NPS which has failed to take of till now. Now they have started offering this product online by tying up with ICICIdirect.com to distribute this product through e channel. Anyone having account with ICICI Direct can apply for this product online and even invest in the form of SIP.

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NPS Lite(New Pension System Lite) for economically disadvantaged sections

National Pension System (NPS) is an initiative of Pension Fund Regulatory and Development Authority (PFRDA), the apex body established by Government of India to regulate and develop the pension sector. NPS has been extended to all citizens of India with effect from 1st May 2009. To extend the coverage of NPS to the weaker and economically disadvantaged sections of the society with their limited investment potential, PFRDA has introduced NPS-Lite which specifically targets the economically disadvantaged sections of society and promotes small savings during their productive life. It aims at building up a corpus sufficient enough to buy an annuity for their old age.

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NPS Swavalamban Scheme: Operational Guidelines The Scheme and its applicability

The Government of India has approved the Operational Guidelines for the Swavalamban Scheme which was announced in the Finance Minister’s Budget speech of 2010-11. The Scheme is applicable to all citizens in the unorganised sector who join the New Pension Scheme (NPS) subject to their meeting the eligibility criteria. Under this Scheme, Central Government will contribute Rs.1000 per year to each NPS account opened in the year 2010-11 and for the next 3 years, i.e., 2011-12, 2012-13 and 2013-14. To be eligible, a person will have to make a minimum contribution of Rs. 1000 and maximum contribution of Rs.12000 per annum, for both Tier-I and Tier-II accounts taken together.

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Complete information on New Pension Scheme (NPS) Tier 2 account

The NPS was launched on 1st May 2009 for all citizens on India. The offer document issued at the launch of NPS mentioned that under NPS two types of account would be available to the subscribers viz., Tier-I account-where you contribute your savings for retirement into a non-withdrawable account, and a Tier-II account –a voluntary savings account form which you are free to withdraw your savings whenever you wish.

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Decoding New version / Draft of New Direct tax Code 2011

The first draft of New Direct Tax Code, floated last year, drew flak after it proposed to tax various retirement / pension schemes at the time of withdrawal in the absence of any social security schemes like medical, old age benefit, death and disability benefit, unemployed person benefit as prevailing in developed countries practicing EET regime . Please refer my earlier post which provides detail description of Earlier Proposed Original New Direct tax code which was criticized specially for taxing retirement benefits. The revised draft, put for public discussion till June 30, retained the income tax exemption given to provident funds, pension funds at the time of withdrawal.

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NPS ( New Pension Scheme ) set to become most attractive investment option in India

NPS (New Pension Scheme) launched by govt. of India in May last year which didn’t kicked of as expected is set to get lot of attraction after release of new draft of Direct Tax Code 2011. According to the revised draft of the Direct Tax Code that was released by the finance ministry the government proposes to extend the EEE method of taxation to Government Provident Fund (GPF), Public Provident Fund (PPF), and the New Pension Scheme (NPS). Al annuity schemes of Life insurance companies are brought under the EEE method of tax treatment. NPS will now enjoy level playing field with other retirement schemes available in the country like PPF, GPF and EPF. This will encourage long term savings by citizens of India who would like to spend their later half of life with regular income or lump sum corpus.

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Various investments under section 80C

Under section 80C of the Income Tax Act, certain investments are deductible (up to a maximum of Rs 1 lakh) from gross total income. Section 80C benefit has been provided to encourage long term savings and investments. This limit is extended to everyone irrespective of their income levels and tax slab.

Please find various investment options under section 80C

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Now Post office are Point of presence for New Pension Scheme (NPS)

Its official now as the much awaited issue of lesser Points of Presence for New Pension Scheme (NPS) has been addressed to some extent as the The postal department has launched a new pension scheme for the public, specially service holders, who are able to deposit a minimum of Rs 500 per month as well as at-least Rs 6000/- annually, which is open for all citizens up to the age of 55 years.

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NPS Tier 2 Account would work exactly as Low cost mutual fund

To make the New Pension System (NPS) more attractive, PFRDA (Pension Fund Regulatory and Development Authority) has introduced the concept of Tier-2 account. This is to provide for withdrawals to meet financial contingencies.

Opening the Tier-1 account is compulsory for everyone opting for NPS. However, the Tier-2 account is optional for the investors, as it is a voluntary savings account from which the investor can withdraw money, any time and any number of times.

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PFRDA to come up with new Guideline to prevent misuse of NPS Swavlamban

In order to propagate New Pension System (NPS) among workers in the unorganized sector, the government, in the Union Budget announced that it will contribute Rs1,000 per year for the next three years for every investment between Rs1,000 and Rs12,000 made by the unorganized sector employees. 

But the scheme called “Swavalamban”, has left the pension regulator body, Pension Fund Regulatory and Development Authority (PFRDA), apprehensive with ways to ensure that the product is not misused and soon will be coming up guidelines regarding this.

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NPS: Now Haryana and Karnataka Govt to Contribute additional Rs 1000 for their residents

Investments in the new pension scheme (NPS) is proving to be doubly profitable for unorganised sector workers.

Following the central government, states are coming to the fore to contribute Rs 1,000 a year to NPS accounts. Haryana and Karnataka have already started contributing, and  according to sources some more states are planning to join these two. This will lead to the total government contribution per account to Rs 2,000 a year.

The Pension Fund Regulatory Development Authority (PFRDA) is on the verge of finalising all modalities of the scheme, and about 1million NPS subscribers in the unorganised sector will be benefitted by this scheme. Even the Non-government organisations and self-help groups have also come forward to join the scheme. But, PFRDA is quite selective in including people in this scheme. Several other groups are also interested in implementing this scheme.

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Start Retirement Planning Early- Retire Smart

Retirement or pension planning becomes an integral part of investment portfolio for ones who are in service. One should start planning for retirement funds as early as possible. Increase in average lifespan, financial commitments, competition, nuclear families etc make it even more important to plan carefully so that one can become totally independent in the later years. Even planning for retirement is a comprehensive process to determine how much money one may need after retirement.

Some people feel that retirement planning is important after the mid years when a person crosses a certain age, say 40 years. In fact, pension planning at later stages becomes difficult as there won't be much time to build and grow a good corpus to sustain a good retired life and eventually such people end up investing in risky investment instruments.

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Central Government Employees NPS gives 14.82% average returns

Central government employees who joined as a part of the contributory New Pension Scheme (NPS) have earned a weighted average return of 14.82 per cent during 2008-09, the first year when three fund managers managed a corpus of around Rs 2,000 crore.

This has outperformed any another form of Investment like PF etc. Its a Win Win situation for both Govt as well as Employees.

This is in contrast to the annual 8 per cent returns between January 2004 and March 2008 when the government had not transferred the money to the three fund managers – SBI Pension Fund, UTI Retirement Solutions and LIC Pension Fund.

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NPS gives 12 % average returns! last year (first year of its operation)

The New Pension Scheme (NPS) for for all citizens of india introduced in May 2009, has generated an average return of 12% in the first year of its operations, outperforming most other long-term saving schemes such as the Employees’ Provident Fund and term deposits.The year-old scheme for All Citizens of India has a corpus of just Rs 10 crore with 6,000 subscribers as compared with the Employees Provident Fund (EPF) which

has over 4.5 crore subscribers with a corpus of over Rs 2,62,000 crore as on March 2009.

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Various Investment options in India

Here are some of the investment options available in India for everyone of us.

1. Savings Bank Account

Use only for short-term (less than 30 days) surpluses

The first banking product used by people, it offers low interest (4%-5% p.a.), making them only marginally better than safe deposit lockers.

2. Money Market Funds (also known as liquid funds)

It offers better returns than savings account without compromising on the terms of liquidity

These liquid funds are a specialized form of mutual funds invested in extremely short-term fixed income instruments. Unlike most mutual funds, they are primarily oriented towards protecting the capital and then later maximising the returns.

Money market funds usually yield better returns than savings accounts, but lower than bank fixed deposits. With the flexibility to issue cheques from a money market fund account now available, this option can be explored before putting one's money in a savings account.

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PFRDA proposes incentive for POP's for New Pension Scheme (NPS)

PFRDA (Pension Fund Regulatory and Development Authority) which launched the New Pension Scheme (NPS) has opened the door for many govt and private sector employees to secure their future through a single united scheme. To reach out to the common man PFRDA has opened many PoPs or Point of presence which are outlets to deal with NPS Scheme. SIB or the South Indian Bank has become the largest service provider in this category among 21 competing banks in India like SBI, ICICI etc.

SIB has altogether about 105 branches which are dedicated as PoPs. PFRDA has now plans to bring out low cost pension schemes which can reach to the millions of poor residing in India.

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