- The latest tax benefits on Tier II NPS is applicable only for government sector subscribers
- Both for government and private sector subscribers, NPS offers host of other income tax benefits
After the recent government notification, investment in Tier II account of National Pension System (NPS) will become eligible for tax deduction under Section 80C. It is to be noted that this is only for the central government subscriber. To be eligible for income tax benefits, contributions by the central government employees in Tier II account of NPS will be locked in for three years.
To open Tier II NPS account, the only pre-requisite is that the subscribers should have an active Tier I account. Activation of Tier II account can be done online or the subscribers can approach their associated offices or any Point of Presence (called as POP). “The minimum amount of contribution to activate the specified account shall be ₹1,000 and and minimum amount of subsequent contribution shall be ₹250,” says the notification.
“There is neither maintenance charges nor exit load on withdrawal. In addition to these benefits, Subscribers have the complete flexibility to decide their own investment choice and that can also be changed once/twice a year,” says Amit Sinha, Executive Vice President, NSDL e-Governance. NSDL e-Governance is the Central Record Keeping agency for National Pension System.
Source: livemint
