Month: October 2024

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Tax Benefits of NPS: How you can reap them? A must read. 

October 30, 2024

The National Pension System (NPS) is an attractive option for individuals looking to secure their future financially. NPS has numerous benefits, such as the potential for high returns, ease of investing, being voluntary, portable, and regulated. Apart from these features, it is also known for attractive NPS tax benefits. Let us delve into how NPS would become an effective tool to save tax and secure your financial future.

What is NPS?

The National Pension System, also known as the National Pension Scheme, is a retirement pension scheme introduced by the Government of India. The main aim of this scheme is to provide regular income after retirement to its subscribers. It allows investing in equities, corporate bonds, government securities, and AIFs.

NPS For Tax-Saving: Benefits

Let’s have a look at NPS tax-saving benefits under different sections of the Income Tax Act.

  1. NPS tax-saving benefits under Section 80(C):  Under Section 80C of the Income Tax Act, investing in NPS is eligible for a maximum deduction under the Income Tax Act of ₹1.5 lakh per annum. This means a subscriber pays less in taxes based on that investment towards their taxable income.
  2. NPS tax-saving benefit under Section 80CCD (1B): Under Section 80CCD (1B) of the Income Tax Act, NPS offers an extra deduction of ₹50,000. This is over and above the ₹1.5 lakh limit of Section 80C, allowing for a total deduction of up to ₹2 lakh in a financial year. This makes NPS a powerful vehicle for tax savings.
  3. Tax-free Withdrawal: When you retire and start withdrawing your NPS funds, up to 60% of your corpus can be withdrawn as a lump sum, which is tax-free. However, the remaining 40% must be used to purchase an annuity, which will be taxed as per your applicable tax slab. This structure allows for a significant portion of your retirement savings to remain tax-free.
  4. Tax Efficiency on Returns: NPS investments generate market-linked and tax-efficient returns. Annual returns are not directly taxed, but the amounts contributed to the overall corpus are taxed upon withdrawal.

How can you secure your golden years by opening an NPS account? Click here to read.

Why Choose NPS for Tax Saving?

  • Long-Term Wealth Creation: NPS encourages disciplined saving and long-term investment, making it ideal for retirement planning.
  • Flexibility: Subscribers can choose their asset allocation and switch between different funds, allowing them to adapt to changing market conditions.
  • Portability: NPS accounts are portable, meaning NPS subscribers can continue their contributions even if they change jobs or move cities.
  • Regulated by the Government: The Pension Fund Regulatory and Development Authority regulates the transparency of NPS.
  • Cost-effective Investment: Any Indian citizen between 18 and 70 can open an NPS account with ₹500 only.

Final Thoughts

The National Pension Scheme comes with attractive tax benefits. It gives you the freedom to invest for your retirement and save taxes at the same time. The NPS scheme offers tax benefits under various sections, and an investor can save up to ₹2 lakh on taxes. This makes NPS an attractive option for modern-day subscribers who are looking to plan for their retirement.

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How can NPS Benefits help you in your golden years? Explained 

October 28, 2024

The government of India introduced the National Pension System, also known as the National Pension Scheme, to safeguard the financial future of Indian citizens. Numerous benefits are associated with NPS. This makes NPS an attractive option to plan for the golden years. In this blog, we’ll discover the key National Pension Scheme benefits and why you should consider investing in it.

The National Pension Scheme encourages individuals to invest in a pension account regularly during their working tenure. The NPS is not limited to just employees in the organized sector; it is open to all Indian citizens between the ages of 18 and 70.  Subscribers can take out up to 60% of their accumulated corpus and buy annuities from the remaining 40% to receive the pension.

National Pension Scheme – Benefits

Let’s have a look at the benefits of the National Pension Scheme.

  1. Attractive Tax Benefits: One of the advantages of the NPS scheme is the tax benefits it offers. Contributions made to the NPS qualify for tax deductions under Section 80C of the Income Tax Act, allowing you to save up to ₹1.5 lakh annually. Additionally, contributions up to ₹50,000 in the NPS qualify for an extra deduction under Section 80CCD(1B), making it a great option for those seeking to maximize their tax savings.
  2. Diversification of Investment: The national pension scheme offers a diverse investment strategy. Subscribers can choose from a mix of equity, corporate bonds, government securities, and AIFs. It enables them to customize their portfolio based on risk appetite, retirement goals, and investment horizon. It empowers subscribers to take control of their retirement savings.
  3. Potential of High NPS Returns: The National Pension System can provide high returns. NPS provides market-linked returns to its subscribers as it invests in equities, corporate bonds, government securities, and AIFs. Moreover, the rate of interest in NPS is on the higher side compared to PPFs and FDs.
  4. Regulated by the Government: The NPS is regulated by the Pension Fund Regulatory and Development Authority (PFRDA). This government entity ensures the transparency and security of investments. This is one of the key advantages of NPS, which builds trust among its subscribers.
  5. Long-term Financial Security: An NPS subscriber can build a substantial retirement corpus over time. Investment in NPS can grow significantly with time thanks to the power of compounding. It provides a reliable source of income after retirement. Individuals can maintain their lifestyle even after they stop working.
  6. Low-cost Investment: Planning for retirement presumably requires more investment. This may not be the case with NPS. Subscribers can open an NPS account with ₹500 only, and they have to maintain the account with an annual investment of ₹1000 only. This makes NPS stand out from other retirement savings schemes.
  7. Upon reaching retirement age, NPS subscribers have the option to withdraw a portion of their accumulated corpus and invest the remaining amount in an annuity. This provides a steady stream of income throughout retirement, ensuring you have financial support even after retirement.

What are the benefits of the NPS calculator, and how can you use it to calculate your accumulated corpus and pension annuity amount? Click here to know. 

Final Thoughts

With its attractive tax benefits, flexible investment options, and the assurance of government regulation, the NPS is an excellent choice for anyone looking to secure their financial future. Subscribers can have peace of mind knowing that their money is invested and regulated by the Government of India. They can build a stable income for years to come.

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Mutual Fund Software For Distributors: Things To Avoid While Choosing It 

October 24, 2024

The mutual fund industry is changing rapidly, and investing in mutual funds has gained more popularity over the years. People invest in mutual funds to achieve their financial goals; however, balancing or managing a portfolio can be a huge task. Here, mutual fund services come into play.

Mutual fund solutions leverage a few software programs to provide investor-oriented solutions. Mutual fund software has many benefits, and MFDs diligently choose it to provide solutions. However, there is a list of things that they should avoid when selecting mutual fund software. In this blog, we’ll discuss things to avoid before finalizing software.

Things to avoid while choosing mutual fund software for distributors

Selecting the efficient mutual fund software for mutual fund services or MFDs is crucial for streamlining the process. Here are a few things that can be avoided.

  1. Complicated User Interface: MFDs should avoid software that has a complicated interface. Software should be easy to use and understand.
  2. Mobile Compatibility Missing: MFDs should avoid software that isn’t mobile-friendly. Distributors may need access on the go to provide mutual fund solutions.
  3. Security Features Missing: MFDs should prioritize software that meets security measures to safeguard client’s data.
  4. Compliance Features Missing: MFDs should avoid software that doesn’t have any built-in compliance features to help them manage regulatory requirements.
  5. Reporting Capabilities Missing: MFDs should avoid software that offers limited reporting options. Detailed reporting is vital for analyzing the client’s portfolio.
  6. Unwanted Bugs: MFDs should avoid software that keeps crashing or has malware. This can hamper their client communication and performance.
  7. Customization Option Missing: MFDs should choose software that enables customization to achieve specific business needs. Avoid software that doesn’t have the flexibility to meet the requirements.
  8. User Feedback Missing: MFDs should avoid software that is incapable of receiving the client’s feedback.
  9. Updates and Upgrades Missing: MFDs should look for software that keeps receiving upgrades and updates. It will enhance the features and usability of the software.

Why do you need professional mutual fund services to balance your portfolio? Click here to learn more.  

Things to consider while choosing mutual fund software for distributors

We have discussed the pointers on what an MFD should avoid while selecting a mutual fund software. Now let’s discuss the factors to consider.

An MFD should look for:

  1. software that offers dynamic features. This can include client onboarding, portfolio management, reporting, analytics, and compliance features.
  2. simple, hassle-free, user-friendly software. It shouldn’t be a task to handle the software.
  3. software that can grow their business. It should be able to handle a large set of clients.
  4. software that can protect the client’s data and other relevant information.
  5. software that has reporting capabilities. It should integrate with tools such as accounting, portfolio management, and customer relationship tools.
  6. software that can provide effective customer support. It should solve queries and doubts efficiently.
  7. software that keeps updating to enhance its security measures and user-friendliness.
  8. software that can be customizable. It should be flexible to change such as theme, color, look, dark or light mode, and other software attributes.

Final thoughts

Mutual fund software has revolutionized the work process of many distributors. Mutual fund services should opt for software that can absorb their needs and requirements. Many software programs are available on the market, but an MFD should look for a secure, customizable, integrated, and user-friendly application.

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