NPS - Your best bet if aiming for high returns with built in safety and tax benefits
Category: Blogs
04 December 2017
NPS Your best bet if aiming for high returns with built in safety and tax benefits
         

National Pension Scheme (NPS) is a retirement savings account wherein the subscriber contributes for getting the benefit in his post-retirement period. Hence it is akin to a Provident Fund or any other Pension or a superannuation fund created for this specific purpose. Whereas as the objective of any Investment plan is to earn maximum returns and equity can provide an edge in this regard, such savings need to be protected mainly due to its actual purpose, that of providing support in one’s old age. It needs to be handled with a certain amount of caution.

The investment Guidelines set out by the Pension Fund Regulatory Authority while allowing investment in equity as an Asset Class, has rightly put a cap of 50% under the “Active Choice” approach thereby balancing the risk-reward equation to the benefit of the account holder. The NPS fund management is similar to a balanced Mutual fund which protects against vagaries of the equity markets but at the same time provides that extra possibility of a higher yield as compared to a fixed income instrument. Moreover, introduction of new aggressive life Cycle Fund in November 2016 allowing upto 75% equity for young investors and recent relaxation of rules allowing investment in midcaps fulfills the requirement of all types of investors.

Any attempt at increasing this cap further will render the fund vulnerable to negative returns in the short to medium term and can affect the accumulated corpus of those who are due for an exit from the fund in a down cycle. It is important to note here that the additional tax benefit up to a contribution of 50,000 per annum which an NPS account holder enjoys, over and above the normal 80C limit, ultimately contributes to the yield on investment. For an NPS investor in the highest tax bracket 30% of the Rs. 50,000 invested which comes to Rs. 15,000/- is being recouped in the same year by way of paying lesser tax to that extent.

This itself provides a tremendous boost to the yield part. Overall if one sees, NPS as a retirement plan has all the benefits one can aspire, be it retirement planning, tax benefit, and superior yield as shown by the earnings it has generated thus far in some of the asset class schemes of some of Pension fund Managers under the NPS. Moreover, it provides remarkable flexibility in terms of switching among Asset class as well as changing your Pension fund manager. Needless to say, a balanced fund approach seems to be in the interest of the account holders and may work out to be beneficial in the long run keeping in mind the basic objective of safe, secured and superior returns on savings.

Link of ET wealth : Click Here




Mukesh Shah
Vice President | Sushil Finance
  • manzil

    hey


  • Ripples Advisory

    Thanks for sharing with us keep up the good job.


  • Ripples Advisory

    Thanks for the sharing your thoughts about wealth and saving money. Keep up the great work!


  • amit malviya

    I Would like the your thought The investment Guidelines set out by the Pension Fund Regulatory Authority.


Leave a Reply
ATTENTION INVESTORS:
Precautions for clients dealing in options • || • Investor Charter : Annexure A – Stock Broker | Annexure A – Research Analyst (RA) | Annexure A – DP | Annexure B - DP • || • Advisory for KYC updation • || • Advisory for Investors • || • Investor Awareness regarding the revised guidelines on Margin Collection • || • Link your Aadhar number with us here. • || • IPO Subscription: " UPI Mechanism is Compulsory for Retail Investors. No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account." • || • Prevent Unauthorized Transactions in your Demat Account remains in investor's account." • || • Prevent Unauthorized Transactions in your Demat Account- Update your Mobile Number with your Depository Participant. Receive alerts on your Registered Mobile number for all debit and other important transactions in your demat account directly from CDSL on the same day. “ISSUED IN THE INTEREST OF INVESTORS” "Prevent unauthorised transactions in your account --> Update your mobile numbers/email IDs with your stock brokers. Receive information of your transactions directly from Exchange on your mobile/email at the end of the day . Issued in the interest of Investors."
About the company
Established in 1982 by Mr. Sushil N. Shah as a proprietary concern, SUSHIL FINANCE, over a period of time, has emerged as one of India’s leading Financial Services.... Read More
AppQRcode GooglepayQRcode


"Gain key market insights and stay informed with a real-time Economic Calendar that tracks major global financial events"
Registered Office : Sushil Financial Services Private Limited., 12, Homji Street Fort Mumbai-400 001 • Tel. No. +91-22-40936000Fax No. +91-22-22665758Email: info@sushilfinance.com

KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary. Receive alerts on your Registered Mobile number for all debit and other important transactions in your demat account directly from CDSL on the same day. Prevent unauthorised transactions in your account Update your mobile numbers/email IDs with your stock brokers. Receive information of your transactions directly from Exchange on your mobile/email at the end of the day.

Sushil Financial Services Private Limited - CIN No. U67120MH1991PTC063438- Member : BSE/ NSE. SEBI Registration No. - INZ000165135.. Depository Participant (CDSL) SEBI Registration No.- IN-DP-504-2020. Research Analyst SEBI Registration No.- INH000000867. BSE Enlistment no for RA : 5051. IPO Distributor. AMFI Registered Mutual Fund Distributor ARN No. 77875 Registered Since : 04-Jan-2010 Valid till : 03-Jan-2027

Compliance Officer Details: Name: Mr. Suresh Nemani, Email id: suresh.nemani@sushilfinance.com, Contact No: 022-40935000. In case of any grievances, please write to us on compliance@sushilfinance.com

Disclaimer :
For Research Analyst: Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Mutual fund investments are subject to market risks, read all scheme related documents carefully. Investments in securities market are subject to market risk, read all the related documents carefully before investing.

Protect Yourself from Fraudulent Activities: We want to ensure your safety and keep you informed. While we have not encountered any cases of impersonation involving our brand, it is important to stay vigilant. Fraudsters may misuse Sushil Finance name or Logo to promote fake brokerage schemes, investment opportunities, or other financial services. If you come across any suspicious activities or are unsure about the authenticity of an offer, please do not hesitate to contact us at : 📞 022-40934060 | 022-40934096 📧 social@sushilfinance.com Stay connected with us on our official social media platforms. Your security is our priority. Stay alert and verify any communication you receive to ensure it is from us.

© 2025 Sushil Finance. All rights reserved.