Ask Value Research

At 63, is it a good idea to invest in NPS?

Dhirendra Kumar tells why it might not be a good idea to invest in NPS at the age of 63

I am 63 years old and still working. Should I invest in NPS to claim additional tax deduction?
- Anand

No. I will not suggest it. NPS is little low on liquidity. It enforces buying annuity to the tune of 40 per cent of your accumulation and you have just two years to do that. Keep it simple. As you are still working, invest in an all equity fund, generate more returns. You will be taxed at 10 per cent, only on the long term gains which you realise, that too in excess of Rs 1 lakh. Invest in a good multi-cap fund if you are used to and ignore the NPS at 63.

This article was originally published on March 28, 2018.

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