Can we change investment option in nps?
Currently, the subscribers under the NPS scheme are allowed to change the investment pattern twice in a financial year. "One can change the investment choice twice in a year.
| Pension Fund Managers | Returns* | |
|---|---|---|
| HDFC Pension Fund | 25.92% | 17.14% |
| UTI Retirement Solutions | 25.54% | 15.88% |
| SBI Pension Fund | 24.15% | 15.39% |
| ICICI Pru. Pension Fund | 26.34% | 16.11% |
In NPS, there are multiple PFMs, Investment options (Auto or Active) and four Asset Classes i.e. Equity, Corporate debt, Government Bonds and Alternative Investment Funds. The Subscriber first selects the PFM, and post selection of PFM, Subscriber has an option to select any one of the Investment Options.
The difference between active choice and auto choice in NPS is self-explanatory, with the active choice providing greater say and control in the choice of asset allocation and funds. In contrast, the auto choice is suitable for people who prefer a passive investment approach.
In the NPS Active Choice, subscribers have the option to choose the ratio in which their contributions will be invested among various asset classes or the NPS funds that offer a defined combination. That is, you get a say in your asset allocation.
You have to shift all
While shifting from one mutual fund to another will result in a tax incidence, switching between fund managers will be tax neutral in NPS due to its open architecture. However, NPS places a restriction here —you can be with only one fund manager.
This can be undertaken online or through Point of Presence. Option to change the Fund Manager can be exercised once in a Financial Year. Option to change Scheme Preference can be exercised twice in a Financial year. Transaction charges will be applicable.
Go to your NPS account log-in. Click on sub menu " Scheme preference Change" under main menu "Transaction" Select Tier type and change the Scheme preference as you intended to do.
While Tier 1 of the NPS is a rigid retirement plan, Tier 2 gives you more flexibility for withdrawals, if needed. The idea is to promote a government-backed product, which offers equity exposure, helps you to plan for retirement (Tier 1), and also provides an option to invest for other life goals (Tier 2).
| Asset Allocation under NPS Auto Choice for Moderate Life Cycle Fund Investor | ||
|---|---|---|
| 40 years | 40% | 35% |
| 45 years | 30% | 50% |
| 50 years | 20% | 65% |
| 55 years and above | 10% | 80% |
Is NPS better than PPF?
However, if an investor is ready to take some risk, NPS is better as it gives around 3 per cent to 3.30 per cent higher return. Apart from this, NPS account holder can claim income tax benefit on up to ₹2 lakh investment in single financial year whereas this benefit in PPF is capped at ₹1.50 lakh on a single fiscal.
You can transfer your pension fund to another pension scheme – generally any time up to one year before the date when you are expected to start drawing retirement benefits. In some cases, it's also possible to transfer to a new pension provider after you've started to draw retirement benefits.
Yes. You may have different PFMs and Investment Options for NPS Tier I and Tier II accounts. Even Asset allocation may be different in both the accounts .
Change portfolio manager
This change can be carried out by clicking on the “Transact Online” tab and choosing the “Change PFM” option. The subscriber can select the desired PFM from the available options and then submit the request.
NPS Pension Fund Managers In India – The Options You Have
Aditya Birla Sun Life Pension Management. HDFC Pension Management. ICICI Prudential Pension Fund Management. Kotak Mahindra Pension Fund.
- Fill contribution slip and submit it to any POP-SP. To find the nearest POP-SP, you may visit "Find your nearest POP-SP"under "Important Links" section available on Home page of this website.
- Download NPS Mobile App and contribute anytime and anywhere on the go.
You will not be able to update your SIP/ STP or SWP amount directly. If you want to increase your SIP/STP or SWP amount, you can start a new SIP/STP or SWP for the additional amount. So if you already have a SIP running for Rs. 1000 and you want to increase your investment to Rs.
Do note you can't have two NPS Tier-I accounts (or 2 PRANs). PRAN stands for Permanent Retirement Account Number. However, you can hold both Tier-I and Tier-II NPS accounts.
A subscriber of the NPS scheme irrespective of being a private employee or public employee is required to make a contribution. This contribution is to be made monthly for the date of the subscription until the age of 60 years of age.
An additional deduction for investment up to Rs. 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under section 80C of Income Tax Act.
Can I claim both 80CCD 1B and 80CCD 2?
The deduction under Section 80CCD(1B) is over and above the deduction availed under Section 80CCD(1), however, the same amount cannot be claimed both under both the sections. Section 80CCD(2): Salaried employees also gets the tax benefit on employer contribution to his or her NPS account.
Low Management Cost – The NPS Tier 2 is the lowest cost pension product as it has a low management cost. As the account maintenance is low, the benefit of accumulated pension wealth to the subscriber becomes larger. Only Indian citizens are eligible to open a Tier 2 account who are aged between 18-60 years.
- Go to your NPS account log-in.
- Click on sub menu " Scheme preference Change" under main menu "Transaction"
- Select Tier type and change the Scheme preference as you intended to do.
While Tier 1 of the NPS is a rigid retirement plan, Tier 2 gives you more flexibility for withdrawals, if needed. The idea is to promote a government-backed product, which offers equity exposure, helps you to plan for retirement (Tier 1), and also provides an option to invest for other life goals (Tier 2).
Can I open multiple NPS accounts? No, opening multiple NPS accounts for an individual is not allowed under NPS. However an Individual can have one account in NPS and another account in Atal Pension Yojna.
However, if an investor is ready to take some risk, NPS is better as it gives around 3 per cent to 3.30 per cent higher return. Apart from this, NPS account holder can claim income tax benefit on up to ₹2 lakh investment in single financial year whereas this benefit in PPF is capped at ₹1.50 lakh on a single fiscal.
- Fill contribution slip and submit it to any POP-SP. To find the nearest POP-SP, you may visit "Find your nearest POP-SP"under "Important Links" section available on Home page of this website.
- Download NPS Mobile App and contribute anytime and anywhere on the go.
An additional deduction for investment up to Rs. 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under section 80C of Income Tax Act.
The deduction under Section 80CCD(1B) is over and above the deduction availed under Section 80CCD(1), however, the same amount cannot be claimed both under both the sections. Section 80CCD(2): Salaried employees also gets the tax benefit on employer contribution to his or her NPS account.
Low Management Cost – The NPS Tier 2 is the lowest cost pension product as it has a low management cost. As the account maintenance is low, the benefit of accumulated pension wealth to the subscriber becomes larger. Only Indian citizens are eligible to open a Tier 2 account who are aged between 18-60 years.
