Latest news with #PensionSystem
Mint
2 days ago
- Business
- Mint
LIC's Smart Pension Plan: 5 key things you need to know before you invest
Life Insurance Corporation of India (LIC) provides for a lucrative Smart Pension Plan to provide investors with an efficient tool to plan and invest for their retirement. This is a non participation, individual, non linked and group immediate annuity plan. This has been designed to facilitate efficient retirement planning for investors, this scheme provides a choice of annuity options thus catering to both members of group superannuation schemes and individuals as well. Here are five must know facts you should know before you consider investing: According to LIC's official documentation, the minimum entry age is 18 years. The maximum age varies from 65 to 100 years, primarily depending on the annuity option selected by the applicant. Furthermore, the minimum purchase price is ₹ 1,00,000. The plan is available for individual applicants including National Pension System (NPS) subscribers and 'Divyangjan' (dependents with disabilities). Note: The basic eligibility criteria discussed above is illustrative in nature. Refer to the official website of LIC for the update eligibility criteria, terms and conditions. The Smart Pension Plan offers for several different annuity options: Annuity type Key features Lifetime Annuity (Single/ Joint Life) Annuity continues for life; in joint life, 100% payable to survivor Annuity certain with life Fixed annuity for 5, 10, 15, or 20 years, then for life Increasing annuity Annuity increases at a simple rate of 3% or 6% per annum Return of Purchase Price Purchase price returned after death or a specified period It is important to acknowledge the fact that annuity payouts can be monthly, quarterly, half yearly or annual. Note: The key features discussed above are illustrative in nature. For the updated features, terms and conditions refer to the website of LIC. All policyholders who invest higher amounts in the plan, receive enhanced and boosted annuity rates. Further, nominees of deceased LIC policyholders are also eligible for better terms. These increased annuity rates act as a financial incentive for individuals planning for a prudent and stable post retirement income stream. Furthermore, nominees or beneficiaries of deceased LIC policyholders are also eligible for favourable terms and added benefits, depending on the policy conditions and the selected annuity option. These features make the plan not only lucrative for individual investors but also considerate of their respective family's financial security. To assist in financial flexibility, LIC permits policyholders to avail of loans after three months from the policy commencement date or after the end of the free look period whichever comes later. This allows individuals to avail and access funds during sudden emergencies or difficult or unforeseen circumstances. That too without terminating the policy. Furthermore, partial surrender of the policy is also permitted under critical, unforeseen circumstances including serious illness or life altering events. This particular feature ensures that the investors are not locked into their annuity completely and can avail liquidity when genuinely required. Death benefit flexibility: Nominees can opt for lump sum payout, instalments or even annuitised benefits. Nominees can opt for lump sum payout, instalments or even annuitised benefits. Joint life annuity: Upon first death, 100% annuity continues for the remaining survivor. Upon first death, 100% annuity continues for the remaining survivor. Payout customisation: Carefully select the frequency and payout mode as per requirement and your future financial goals. Through the online mode: Visit the official website of LIC to apply directly. Through the offline mode: You can purchase the plan through LIC agents, designated representatives, or local CSC centres across the country. Documentation needed: You must keep your Aadhaar card, PAN card, address proof, age proof along with recent photographs and bank details ready to meet any required eligibility requirements. Select options: Choose your preferred annuity type and payout frequency. The payout frequency can be either monthly, quarterly, half yearly or annually depending on the applicant's choice. Discuss with experts: You can also consult an LIC agent or refer to the official web link of the plan for detailed plan features and benefits before opting for it. Hence, with a growing elderly population, rising cost of living, lack of efficient planning etc., structured pension products such as LIC's Smart Pension Plan aim to provide financial independence to retirees. Disclaimer: This article is for informational purposes only and does not constitute financial advice. Please consult the official LIC website or authorised representatives for the latest details before making any investment decisions.
Time of India
4 days ago
- Business
- Time of India
Form 16 for ITR filing: Higher standard deduction for these taxpayers to other changes in Form 16 for FY 2024-25 (AY 2025-26)
By June 15, 2025, salaried employees should receive their Form 16 for the financial year 2024-25 from their employer. This year, Form 16 will undergo certain changes due to the changes announced in the July 2024 Budget. Your Form 16 will change in the following three ways this year: 1. Taxes deducted from other incomes: Your Form 16 will show the tax deducted from your other sources of income and also the Tax Collected at Source ( TCS ) on expenditures on specified items. This will happen if you have submitted Form 12BBA to your employer. Budget 2024 amended the income tax rules to allow salaried individuals to inform their employers of the TDS on the individual's other sources of income, as well as TCS from specified expenses of the individual. This TDS and TCS can then be adjusted against (subtracted from) the total tax deductible from the employee's salary. This would help the employee as total TDS from salary would be reduced accordingly. Suresh Surana, a practising chartered accountant, says, "This year, Form 16 will show not only tax deducted by the employer on the salary income, but will also show tax deducted on other sources of income such as interest on fixed deposits or tax paid as TCS on foreign travel expenditure, etc. However, this will happen only if a salaried employee has shared the details of other taxes deducted (TDS/TCS) via Form 12BB." Live Events Also Read: New form to reduce TDS on salary 2. Higher standard deduction from salary under new tax regime: From FY 2024-25 (AY 2025-26), the standard deduction from salary has been increased from Rs 50,000 to Rs 75,000 under the new tax regime. In Form 16, if you have opted for the new tax regime for FY 2024-25 (AY 2025-26) for TDS on salary, you will receive a higher amount of Standard Deduction from your salary when your employer deducts tax at source. Income tax laws for FY2024-25 allow a Standard Deduction of Rs 75,000 under the new tax regime. However, while filing ITR for FY 2024-25 (AY 2025-26), if an individual switches from the new tax regime to the old tax regime, then only standard deduction of Rs 50,000 will be allowed to be claimed from the salary income. Also Read: Last date to receive Form 16 by salaried employees 3. Higher NPS deduction on employer's contribution: From FY 2024-25, the new tax regime allows a higher deduction from gross taxable income to the employee on the employer's contribution to NPS. An employee can claim a deduction of up to 14% of their basic salary under Section 80CCD (2) in the new tax regime. This deduction can be claimed on the employer's contribution to the National Pension System (NPS) account of the employee. This higher deduction would reflect in your Form 16 only if you are under new tax regime for TDS from salary. Here also, if the tax regime is switched from the new to the old tax regime while filing ITR, then the deduction will be reduced. An employee will be eligible to claim a deduction of only 10% of their basic salary under Section 80CCD (2) on the employer's contribution to NPS in the old tax regime.
Mint
28-04-2025
- Business
- Mint
One ID, One Investment: Subhasis Ghosh on How to Start Your NPS Journey
If you've been thinking about opening an NPS (National Pension System) account but feel unsure about where to begin, Episode 3 of 'NPS Made Simple' breaks it down step by step. In conversation with Mint, Subhasis Ghosh, CEO of Kotak Mahindra Pension Fund, explains just how easy it is to get started—and why the system is built for lifelong flexibility. Q: So, let's say a group of young professionals or college friends, just starting their first jobs, want to open an NPS account. Where do they begin? First off, kudos to them! If they're thinking about NPS this early, they're financially ahead of the curve. To open an account, all they have to do is go through a Point of Presence (POP)—which is just a fancy term for a registered distributor. Almost every major bank is a POP. So, if you use your banking app, you'll likely find an 'Open NPS' option right there. Q: Is the process fully digital? Yes, absolutely. If your KYC is already completed with the bank, it's a two- or three-step process. Upload a few documents—Aadhaar, PAN—select your fund manager, choose between active or auto investment mode, and make your first contribution (as little as ₹ 1,000). Once done, you'll get your PRAN—Permanent Retirement Account Number—and you're officially in. Q: What is PRAN exactly? Think of it like your Aadhaar or UAN for retirement. It's your unique lifelong identity within the NPS system. Whether you switch jobs, take a sabbatical, or freelance, your PRAN remains the same. The beauty of NPS lies in this portability. Your entire pension journey is tied to this one number. Q: And POP—you said it's a kind of distributor? Yes. POPs are entities authorized to onboard NPS subscribers. Your bank is likely already a POP, and you can also find many of them online. Just Google 'NPS POPs' and you'll see a list. Most banks and even some fintechs offer this. Q: What if someone prefers an offline route? That's possible too. You can visit your bank branch or an authorized POP location. But honestly, everything—from registration to monitoring—is smoother online now. Q: Is there an official NPS app to manage investments? Yes. The NPS Trust app (operated by CRA—Central Recordkeeping Agency) allows you to track your balance, review fund performance, switch fund managers, adjust equity-debt ratio, and more. Many banking apps also offer similar features. Q: You mentioned earlier that NPS is a 'one-way street.' What does that mean? It means that once you exit the system, you can't re-enter. This isn't like mutual funds where you can jump in and out. NPS is designed to encourage long-term retirement discipline. So yes, you can exit early, but you'll have to forfeit re-entry. Q: Can people withdraw money before 60? Yes—under two conditions: Partial withdrawals of up to 25% of your contributions (not including returns) are allowed three times for specific needs like illness or education. A full exit before 60 is possible, but only 20% is paid out, and the remaining 80% must be used to buy an annuity. However, if your total corpus is below ₹ 2.5 lakh, you can withdraw the full amount without annuity obligations. Takeaway: You can open your NPS account in minutes, but the real commitment is to your future self. As Ghosh puts it, 'It's like Hotel California—you can check out, but you can't come back in. So get in when you're ready to commit to lifelong financial dignity.' Watch Episode 3 to learn how to open, operate, and manage your NPS account with ease. First Published: 28 Apr 2025, 06:08 PM IST
