NPS में खाता खुलवाने के फायदे (Tier II Account)
Despite the flexible nature of NPS Tier II account together with some of its advantages, total asset under management under NPS Tier II is way short than in NPS Tier I account. First, of all you need to have in place an NPS Tier I account.
Below we list some of the advantages of maintaining NPS Tier II account in your financial portfolio:
1. Withdrawal flexibility: Funds deposited towards NPS Tier II account can be withdrawn at anytime and with no quantum limit. It is to be noted NPS tier I account comes with a cap on withdrawal of up to 60% of the accumulated corpus and the amount can further be withdrawn only on attainment of retirement.
2. Works like a mutual fund: NPS tier II account works similar to a mutual fund and in the long-run can accumulate a good enough corpus for you due to the power of compounding.
3. Low fund management cost: The product commands a low FMC of just 0.01%, making it the cheapest product on offer.
4. Debt plans of NPS tier II have generated better returns: This is due to the involvement of low expenses, which enable the return from the instrument to be higher than even diversified large cap funds across 3 and 5-year time frames.
Tax Benefits
5. Possibility of tax benefit under Section 80CCD : The lock in period of 3-years shall be applicable to avail the benefit that will be offered to government employees.
6. No tax implication of switching between fund managers: In case of switching in other products, there is application a capital gains payment. But in NPS, switching between fund managers does not result in any tax incidence. Fund manager can be changed once a year while asset allocation can be revised twice in a year.
Source: goodreturns