Tuesday, November 15, 2016

NPS withdrawal rules taxation

nps withdrawal rules taxation



NPS allows an tax deduction additionally of Rs. 50,000 over and above the limit of Rs. 1.50 lakh available under Section 80C. This means that if investors put Rs. 50,000 for getting the additional tax benefit under section 80CCD, they can save Rs. 5,150, Rs.10,300 and Rs.15,450 for the tax brackets of 10 per cent, 20 per cent and 30 per cent.

Rules for government sector subscribers/employee for retirement:
An employee should invest minimum 40% of the amount in annuity,for option withdraw the balance in lump-sum.you can estimate your scheme amount by using NPS calculator.The lump-sum withdrawals can be postponed till a subscriber/employee attains the age of 70 years.In the case of the accumulated pension being less than Rs 2,00,00/- can choose to withdraw the complete amount.

Rules for government sector subscribers/employee who take voluntary retirement:
A minimum of 80% of the amount should be invested in annuity.In the event of the accumulated pension being less than Rs 1 lakh, an individual can choose to withdraw the complete amount.

Rules for Corporate sector subscribers/employees and citizens on retirement:
An individual should invest a minimum of 40% of the amount in annuity, with an option to withdraw the balance in lumpsum.The lump sum withdrawal can be postponed till a subscribers/employee attains the age of 70 years.In the event of the accumulated pension being less than Rs 2 lakh, an individual can choose to withdraw the complete amount.
Rules for Corporate sector subscribers/employees and citizens who opt for voluntary exit:
An individual should maintained an account for at least 10 years.80% of the amount should be used to purchase annuity.In the event of the accumulated pension being less than Rs 1 lakh, an individual can choose to withdraw the complete amount.

Rules for Corporate sector subscribers/employees and citizens on retirement:
An individual should invest a minimum of 40% of the amount in annuity, with an option to withdraw the balance in lumpsum.The lump sum withdrawal can be postponed till a subscriber attains the age of 70 years.In the event of the accumulated pension being less than Rs 2 lakh, an individual can choose to withdraw the complete amount.

Rules for Corporate sector subscribers/employees and citizens who opt for voluntary exit:
An individual should be maintained an account for at least 10 years.80% of the amount should be used to purchase annuity.In the event of the accumulated pension being less than Rs 1 lakh, an individual can choose to withdraw the complete amount.

Rules pertaining to death of corporate sector subscriber:
In the case of death of a subscriber/employee, the nominee can choose to withdraw the accumulated amount as a lump sum.

Rules pertaining to death of government sector subscriber:
In the case of a subscriber/employee passing away before reaching retirement age, 80% of the amount in the account should be used to purchase annuity. The case of this lies on the nominee/legal heir.In the case of the accumulated pension being less than Rs 2 lakh, a nominee can choose to withdraw the complete amount.

Partial withdrawal rules:
A subscriber/employee can withdraw only 3 times during the tenure of his/her subscription.
A subscriber/employee should maintain a minimum gap of 5 years between ant 2 withdrawals. This gap can be reduced only during medical emergencies.
A subscriber/employee can withdraw only 25% of his contributions towards this scheme.
A subscriber/employee should be a member of this scheme for at least 10 years in order to be eligible for partial withdrawal.
Partial withdrawal is allowed only in certain exceptional cases, like education of his/her children, marriage expenses, house construction or medical emergencies.