Financial Freedom

Brace your Second Innings with Grace

Retire-O-Meter
Inflation- A double-edged Sword Value of Rs 30,000 in 2013 What is NPS? Equals Value of Rs 3.01 lakh in 2043 A defined contribution *If inflation rows at 8% p.a scheme Invests in Equity & Debt Know Costs your You can manage your corpus 1) Monthly Expenses Or 2) Consumer Price Index Outsource it to a Pension 3) HealthFund Inflation Manager 4) Lifestyle Inflation Act Today for a Better Tomorrow Tax Benefits: 1) Save at least 10% every month 2) Early birds benefit from compounding for Deduction under Section 80 C 3) Opt a monthly savings strategy for individual contributions 4) Allocate 30-40% of your bonus to this kitty Additional deduction if NPS added to CTC Why NPS? 1) Regulated by PFRDA 2) Low Cost Investment Why NPS? 3) Disciplined Saving Strategy 4) Option to invest in Regulated byequity PFRDA& beat inflation Low Cost Investment 5) Tax underSaving Section 80 C Benefit Disciplined Strategy 6) Flexibility to invest in equity and & Option to invest in equity debt beat inflation Flexibility invest in equity For further details,to Contact and debt nps@hdfcsec.com For further details, Contact nps@hdfcsec.com Phone: +91-22-39019400

21st February 2014

Plug the Tax Leaks with NPS

Tax saving countdown has begun. You would be busy evaluating various investment options, which can help you save taxes. Options galore when it comes to saving taxes. However, there are far and fewer investment options, which stand the test of earning returns and saving taxes. National Pension System (NPS) is one of them. Understanding NPS NPS is a contribution scheme, which allows you to save in a staggered manner for your retirement during your working life. It provides an active choice option under which you can decide the manner in which the NPS corpus is to be invested. You can invest up to 100 per cent of your NPS kitty in fixed income instruments and government securities. Investment in equity market instruments is restricted up to 50 per cent.

NPS A tax-friendly tool Individual contributions to NPS are eligible for tax deduction up to a maximum limit of Rs 1 lakh under Section 80 C. However, very few investors as well as employers are aware that NPS gives you the leeway to save taxes over and above the standard deduction of Section 80 C. This additional tax deduction can be availed under Section 80CCD (2). Under this section, up to 10 per cent of an employee's basic salary put in the NPS is tax deductible. Refer Table Tax Saving Tip: Add NPS to your CTC Salary Without With NPS Component NPS Basic Salary NPS Contribution (10% of Basic) Gross Salary Taxable Income PF (12% Basic) Tax Applicable Rs 5,85000 Nil Rs 11,50,000 Rs 11,50,000 Rs 1,38,000 Rs 1,75,000 Rs 5,85000 Rs 58,500 Rs 11,50,000 Rs 10,91,500 Rs 1,38,000 Rs 1,57,450 Rs 17,500

If you are not equipped to make your own financial decision, a Pension Fund Manager will invest your NPS money in a basket of equity and fixed income instruments in a pre-defined ratio based on your age. This is called the auto choice option.

Tax Saved

Financial Freedom
Brace your Second Innings with Grace
21st February 2014