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NPS To Soon Introduce SIP Facility For Investment

By Staff
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Subscribers of NPS (National Pension System) will soon be given an option to invest through SIP (systematic investment plan). "We are working seriously to bring a SIP like model for NPS subscribers where they can direct their banks to auto-debit a specific amount on regular intervals towards investment in NPS," says Amit Sinha, Executive Vice President at NSDL e-Governance to Mint.

NPS To Soon Introduce SIP Facility For Investment
 

The Mint report further said that Sinha did not specify a launch date for the SIP facility but said that it may be made available in a few months.

SIPs, a popular investment mechanism used in mutual fund schemes, is where a fixed amount is deducted from a subscriber's bank account, towards an investment, at the instruction of the subscriber. This allows subscribers to manage their finances and maintain investment discipline.

Enabling SIP facility in NPS would be the most recent upgrade in the government's efforts to attract more investors.

In a recent notification, the government said that NPS Tier II account contributions would be eligible for tax deduction under Section 80C of the Income Tax Act. Previously, NPS tier-II had no lock-in, but after the notification, such tax-deductible contributions by the government employees will be locked in for three years. Notably, this benefit applies to government employees only as for those working for private institutions, there are no lock-in restrictions.

Also, PFRDA launched the option to get e-PRAN together with the welcome kit online while making NPS subscription.

Read more about: nps retirement
Story first published: Saturday, July 11, 2020, 15:41 [IST]
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