Should I invest in NPS? | Should you invest an extra ₹ 50,000 in NPS to save tax?


NPS has evolved as a good financial product for retirement planning. The government is trying to make it more attractive by giving extra tax benefits to the investors. The NPS is drawing attention because of its tax benefit under section CCD (1b). It also forces you to save regularly, save on taxes and build a retirement corpus. If withdrawal is made after 60 years of age, at least 40 per cent of the accumulated funds must be used to buy an annuity. The rest of the money can be withdrawn in a lump sum.
If you are looking for a tailor-made government sponsored scheme to invest for your retirement, you can consider investing in NPS. But you should opt for it only if you are prepared to hold on to your investments till your retirement at 60 years. If you can take care of your long-term investments on your own, you can go ahead with your investments in Equity Linked Savings Schemes (ELSSs) or diversified equity funds.

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  1. Plz tell us all about MF how does it works how can we take more benefits from it everything and about the various kinds of investments also…

  2. What will be the returns for Mr B after applying the LTCG tax ?

  3. Thanks for the video.
    How Mr B will get tax free on maturity amount? Which equity he need to invest if he want tax free ?

  4. My idea behind investing in NPS is that I am not dependent only on NPS for retirement savings. I have EPF and am also investing in equity mutual funds. I am just trying to diversify my investments.
    Thanks a lot for that interesting calculation, it is always better to be informed about your investment instruments. Good Luck 👍👍

  5. Crisp and clear explanation.
    Exactly what I was looking for.

  6. Thanks team. Good video, better content and awesome representation. Keep posting.

  7. How about impact of LTCG on this comparison . Who is winner?

  8. My wife in government sector. And nps deducted from his salary. I want to know if she invested in nps non gov nps AMC. Then how can she invest.?

  9. Came here to find out if NPS is an option for me. Found my answer. Good video. To the point. Thank you!

  10. Can I withdraw entire money after 60 years?

  11. I am 46 yr old Nri and want to invest in NPS. Need advice. Is the maturity value taxable?

  12. Wonderful efforts guys !!! Keep making such videos 🙂

  13. kaise NPS Mai 50000 contribute kar Sakta hi,Abhi mera contribution Kam hai,Mai khud se kar Sakta hu

  14. What about the capital gain tax for Mr.B ?

  15. I am not sure whether returns from equity MF is completely tax free, as it comes under long term capital gain and it is taxed. Please correct me if I am wrong.

  16. Thank you. .. Great thing about your tutorial is you're genuinely helping investors to decide whether to go with particular vehicle or not. … Appreciated

  17. Thank you for making this video. I have few questions
    1. I have exhausted my 80C 1.5 lacs by going for VPF which gives me 8.65%. So now can i go for NPS and get 50k tax free?
    2. In this video you havent mentioned the amount saved through tax for 50k for 25 years would save additional 3.75 lacs correct? or am i wrong

  18. If I resign from govt post then what would happen to NPS.

    Again if I join after few years in another job should I give the previous NPS or new one

  19. I have totally understood NPS now, thanks to this video, beautifully explained, NPS is not for me, I will rather invest in MF.

    I was pretty much confused with what happens to the total amount after I turned 60 years. I have read so many articles but they confused me a lot. But with the example given in this video I have understood that I will lose my hard earned money.

    I thought of saving some tax by investing in NPS but this video gave a good clarity.

  20. Hi Very helpful indeed.. But I must disagree with the explanation given for Mr. A and Mr B. First thing older ages needs more security.. So after age of 52 equity exposure should be lesser .. Because what if the man turns 60 and market faces a crash then his entire life would be a disaster.. Second thing you choose NPS will give 10% return.. But a good pension fund like hdfc is giving 12% average return.. Even Govt securty and corporate bonds are also giving that much return ( So a person should always opt for NPS atleast with Rs4000 PM.. And equity exposure should be as per risk appetite .. Rest he can invest in equity MF.. So his life will be more secure… And after age of 52 he must reduce equity exposure to secure his old age..

  21. very very clear and helpful video…thanks for all the information you guys are posting 🙂

  22. I am 50 yrs old..should I invest in NPS?

  23. well explained !! reallyy nyc 🙂
    was in knowledge abt Equity MF but NPS details are really helpful..
    same like NPS calculator on HDFC sec site !!
    explained superbly !!

  24. I'm a 24 year old self employed professional with an annual income of 6lacs pa. I've already used up my 80C exemption of 1.5 lacs. so for that extra 50k deduction in tax, should i invest 50k per year in nps ? My thinking is I'll get an extra 50k for tax deductions and in 35 years nps policy may change and it would get benefits which it currently lacks.

    PS: All my other investments are into equity mfs and balanced funds.
    Thanks in advance. Your videos help us a lot.

  25. i got two nps account with same name by as govt. employee and other as can u help me to resolve this prob. and what are the remedy available to me to merge accounts????????

  26. Amazing video series on NPS. The last example given in the video comparing the two investments clearly gives you a picture of what the best returns would be. A well simplified video. Thanks for sharing

  27. can I invest 1lac in nps and 1 lac in elss and get combined tax benefit of 2 lac rupees. I am an central government employee

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