The National Pension System (NPS) is arguably one of cheapest investment products in the world. On an investment of Rs 1 lakh, the fund management fee is just Rs 10 a year, compared to Rs 1,500-2,500 charged by a mutual fund or a Ulip. It is also a very tax-friendly product. Besides enjoying tax deduction under Sec 80C, the NPS offers an exclusive window of Rs 50,000 under Section 80CCD (1) and additional deduction to corporate employees who invest in the scheme under Sec 80CCD (2). Besides, there is no tax incidence if the investor switches from one asset class to another or changes his pension fund manager.
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