If you want to create a retirement corpus for pension, then National Pension System (NPS) can be the best option for this. The government runs a scheme to financially secure the future of private job seekers. The name of this scheme is National Pension Scheme. If you invest properly in this scheme, then after retirement you can get a pension of up to 50 thousand rupees every month. Here we are going to give you information about how you can get this much pension. Let us tell you how much money you will have to invest every month to get a pension of 50 thousand rupees.

Get tax exemption

NPS account holder gets income tax exemption of up to Rs 1.5 lakh under section 80C and additional Rs 50,000 under section 80CCD. However, the income from annuity is taxed. This income can be deducted from all your other income. By adding in, your slab will be determined and income tax will have to be paid accordingly. Whereas in Tier-1 account of NPS, the benefit of tax exemption is available on both contribution and withdrawal. In this case, the account holders will also get this benefit.

Heavy duty scheme

NPS is a mode of investment. It has been designed in such a way that even after retirement people can afford their expenses. It has less risk than equity and higher returns than PPF or Fixed Deposit. There are four asset classes in NPS – Equity, Corporate Debt, Government Bonds and Alternative Investment Funds. Investors have two options to invest in NPS – Active and Auto Choice.

Subscriber cannot withdraw the entire corpus on maturity. He has to invest 40% of the total NPS corpus in buying an annuity plan from a life insurance company. This annuity amount is the regular pension that the subscriber will get after retirement. The remaining 60 percent amount can be withdrawn in lump sum. However, some part of this can also be invested in buying an annuity. Thus an NPS subscriber can use more than 40% of his corpus and up to 100% to buy annuity. The more money you leave to buy an annuity, the more pension you will get after you retire.

How to get Rs 50,000 pension

If you want to get a pension of 50 thousand rupees every month after retirement, then you have to invest in this way. For this, you have to start investing from the age of 24. You have to deposit Rs 6000 every month. Accordingly, you will have to save Rs 200 daily. If he invests in NPS like this for 36 years, his total NPS investment at maturity at 10% per annum will be Rs 2,54,50,906.

If he spends 40% of his total corpus on buying annuity, he will get a pension of Rs 50,902 per month after retirement. If someone wants to get a pension of up to 75 thousand rupees after retirement, then he will have to invest 10 thousand rupees every month in NPS. Think of it like a 25 year old person invests Rs 10,000 every month in NPS for the next 35 years.

His total NPS investment at 10% annual return at maturity is Rs.3,82,82, 768 will be Rs. If he spends 40% of his total corpus on buying annuity, he will get a pension of Rs 76,566 per month after retirement.

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Meanwhile, Finance Minister Nirmala Seemaraman has given a big statement regarding tax exemption. He told that the optional income tax system with seven tax slabs was brought by the government so that people of low income group have to pay less tax. Sitharaman said that in the old tax regime, every taxpayer can claim exemption in about 7-10 ways.

No exemption in the new system

Income tax rates are between 10, 20 and 30 percent depending on the income limit in the old tax regime. The minister said that along with the old tax regime, the government has come up with another system, in which there is no exemption, but it is simple and the tax is less. Sitharaman said, ‘I had to make seven slabs so that there are lower rates for the people of low income group.’

Alternative income tax system was introduced in the budget 2020-21. The Finance Minister was speaking on the occasion of the release of the book ‘Reform Nation’ by Gautam Chikramane, Vice President of Observer Research Foundation on Friday. During this, he said, the government had introduced an alternative income tax regime in the General Budget 2020-21, under which individuals and Hindu Undivided Families (HUFs) were taxed with lower rates. However, other tax exemptions like rent allowance, housing loan interest and investment under 80C are not given in this arrangement.

Let us tell you that tax payers have been demanding from the government for a long time to increase the income tax exemption limit from Rs 2.5 lakh to Rs 5 lakh. Along with this, there is also a demand to increase the investment limit under 80C. It will be a matter to be seen which demands are considered by the government and can be announced in the budget on 1st February.

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