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1. How to plan your taxes through NPS (National Pension Scheme)? What is the NPS all about?
National Pension System (NPS) is a voluntary retirement savings scheme which is specially designed to facilitate the subscribers to make decisions regarding their future through savings during their working life.
In the last budget, the government has introduced a special Income Tax exemption under Section 80CCD (1B), which has an upper limit of Rs.50,000/- per financial year per person. This is in addition to the normal benefits under Section 80CCD (1) that is available on other similar schemes.
Under NPS scheme, two types of accounts i.e. Tier I and Tier-II are available for the investors. In case of Tier-I NPS, government employees will have to contribute 10% of (basic+DA) and the government will match that contribution. In case of non-government employees, the minimum contribution has to be Rs. 500/- per month.
