\ National Pension System (NPS) investment proof documents should be submitted to claim the tax benefit of up to 50%

Key Highlights :

1. National Pension System (NPS) is a voluntary retirement savings plan.

2. Subscribers to NPS are eligible for tax benefits.

3. Tax benefits are applicable for investments in Tier I account only.

National Pension Scheme (NPS) is a voluntary retirement savings plan that offers subscribers tax benefits on their investments. Tier I accounts are limited to investments up to Rs. 50,000. What are the tax benefits available under NPS? Tax advantages for partial withdrawals Before turning 60, subscribers can make limited partial withdrawals from their NPS tier I accounts. Budget 2017 states that withdrawals up to 25% of subscriber contributions are tax-free. Tax benefit for purchasing an annuity: The amount invested in the purchase of an annuity is completely tax-exempt. The annuity income you receive in the succeeding years, however, will be taxable. Tax advantage for withdrawals in lump sums: After the subscriber turns 60, up to 40% of the total corpus that is withdrawn as a lump amount is tax-exempt. For example, if your total corpus at age 60 is 10 lakhs, you can consider 40% of that amount, or 4 lakhs

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