NPS Calculator: How You Can Become A Crorepati? Turn 62 Lakh To Rs 2.98 Crore

National Pension Scheme (NPS) is key government backed retirement saving scheme that was introduced way back in 2004 for government employees. However, NPS saving scheme was opened for all citizens of Indian origin later in 2009. NPS scheme has been regulated by Pension Fund Regulatory and Development Authority or PFRDA.

NPS scheme, just like EPF and PPF, is an EEE instrument that helps you save tax at the time of maturity implying that the entire pension withdrawal amount becomes tax-free. EEE refers to tax-free status for investments.

There are number benefits of NPS scheme that can be detailed below:

• It is quite easy to open NPS scheme and if you have all the required documents, you can open your account online too within minutes
• The finance ministry introduced tax benefits under NPS scheme that may include the tax deductions and you can get 60% of the maturity corpus free from any tax.
• Fund management charges of NPS remain quite low as compared to charges levied by insurance firms and mutual funds. It has emerged as one of the cheapest products available in the market.
• You may avail NPS Tier II alternative where there is no restriction on withdrawal but you will not get tax benefits on your contributions. Also, you will be able to invest in NPS Tier II only if you have regular Tier I account.
• NPS Tier I alternative offers investors immense tax benefits
• Choices are rising for investors. As DPS Pension Fund became operational last year, investors in NPS can now select from 11 pension fund managers. Investors can also change their pension fund managers once a year.
• NPS offers individuals the much-needed financial security during their post retirement phase. NPS scheme not only provides several benefits but can also significantly help individuals escape tax from the entire corpus at maturity. It is worth noting that section 80C permits for tax deduction on contribution up to Rs 1.5 lakh within the overall limit.

How To Turn 62 Lakh to Rs 2.98 Crore And Become a Crorepati?
For Instance If you start your investment at the age of 44 with a contribution of Rs 20,000 per month and continue till the age of 70, your total year of contribution will be 26 years. Let us take your expectation of return on investment at 10% with an annuity purchase of 40% and expected annuity rate of 6%. In this scenario, you will get a corpus of Rs 2,98,13,105 crore with a total investment of Rs 62,40,000 lakh and total gain will be Rs 2,35,73,105 crore. Your expected monthly pension will be Rs 59,626 thousand. This is just an example. Corpus of every individual will differ that will directly depend on contributions and returns.

Eligibility: Indian citizens that will also include non-resident Indian (NRIs) will be eligible to join NPS. Meanwhile, Overseas Citizen of India or OCI cardholders will not eligible to join the tax saving scheme. The individuals opting for NPS scheme should be between 18 year to 70 years of age.

Documents Required: The following documents given below will be needed for NPS saving scheme:

• Identity Proof such as PAN Card, Aadhaar Card, Passpost, Driving License, and Voter ID
• Address Proof: The individual must provide proof of address that may include bank statement, rental agreement, Government issued address proof, or electricity bill, water bill, and gas bill.
• Age Proof: The individual must provide birth certificate, PAN card, Passport, or any other age proof that is valid
• Latest passport size photograph

Steps to create National Pension Scheme (NPS) account online:

• You need to visit official website of eNPS i.e. enps.nsdl.com
• Navigate to Registration or click the option of "Open Your NPS Account"
• Select between Corporate Subscriber and Individual Subscriber
• Fill online form with details such as personal, bank, and contact information
• You need to upload the scanned images of necessary documents
• Start with initial contribution with a minimum of Rs 500 for Tier I and Rs 1000 for Tier II
• You will get an acknowledgement number that can be used for tracking your application status
• Once registration process has been completed all documents have been verified, you will receive a Permanent Retirement Account Number also known as PRAN that you can use for all future transactions and inquiries pertaining to NPS account

Interest rate for NPS: It is vital to note that there is no singular rate of interest for NPS scheme. The reason behind it is because NPS is a market linked implying the interest rate for the returns depends on performance of the assets that individuals invest in.