I have just turned 60 and my NPS account is now to be closed. I have opted for 40% of the amount to be used to buy a pension from LIC ( Jeevan Akshay VI) and 60% of the corpus to be deposited in my bank account. What would be the income tax implication on this 60%? Is indexation benefit available for the gains?
-Vinod Jain
Maturity proceeds from the NPS attract tax. As per current laws, up to 60 per cent corpus on maturity can be withdrawn while at least 40 per cent has to be used to buy annuity, which you have done. The 60 percent of corpus which you are withdrawing in lumpsum will be taxable as per your income tax slab rate. Indexation benefits are not available on this. The pension you will receive from the annuity plan on a monthly basis would also be taxed.
This article was originally published on December 01, 2014.
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