I’ve been thinking of investing in the NPS since 2009, but have been discouraged to do so. Should I invest in it, taking into consideration the tax benefits, locked investments and pension as well?
-Kapil Kawatra
If pension and retirement savings is your goal, then you should consider investing in the National Pension Scheme (NPS), which will be the only market-related investment vehicle with tax benefits after the DTC comes into effect. However, the NPS does come with the constraint that you can't pull out your money in the interim. That said, the NPS has become even more attractive after 1st April, because from now on, 10 per cent of your basic annual salary that goes into the NPS can be deducted from your taxable income. This deduction comes over and above the 80C benefit that you already get. This is a significant benefit added to the NPS, which makes it even more advantageous.
This article was originally published on April 25, 2012.
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