Cabinet clears pension scheme for senior citizens with 8% return

pension scheme

PFRDA may issue foreign investment guidelines for pension sector

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	A pension scheme is a long-term savings plan that helps people save money for the future and it is a tax-efficient way to save money during your working life.</div>
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	Over a period of 40-50 years, a pension scheme ensures an adequate corpus to deal with rising medical bills and expenses and a higher cost of living, driven by the country&#39;s inflation.</div>
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	The amount of money saved into a pension scheme account is referred to as &lsquo;contributions&rsquo;. A pension scheme allows us to invest regular payments or transfer a lump sum amount into a pension fund account for retirement planning. When the policyholder dies, the entire pension amount is paid to the nominee or legal heir of the deceased.</div>
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	People invest money under a pension scheme plan so that the fund accumulates over a certain period of time. That&#39;s why, the earlier we create a pension plan, the more time our retirement scheme will get to grow and the bigger the pension amount will be in the long run.</div>
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	<strong>Tax benefits</strong></h4>
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	Unlike a regular savings account, money invested under a pension scheme earns tax advantages. Pension schemes for retirement planning qualify for tax deductions under Section 80CCC of the Income Tax (I-T) Act, 1961.</div>
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	In fact, you can avail of tax deductions up to a certain amount to buy a new pension policy or to make payments towards the renewal of an existing policy providing a periodical annuity or pension.</div>
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	Under pension schemes, a certain amount is paid at maturity, which is exempted from tax and the rest amount is used to purchase an annuity. Annuity earnings are added to the taxable income and taxed according to your income tax slab. Also, no TDS (Tax Deducted at Source) is deducted on annuities.</div>
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	<strong>How much to pay?</strong></h4>
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	The amount you and your employer pay for your pension scheme may vary depending on which type of pension scheme you choose. However, by law, you and your employer have to pay a minimum amount into your pension scheme. Under a pension scheme, both employees and employers contribute to the scheme, and the greater the contribution, the greater the corpus.</div>
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	<strong>Benefits of pension schemes</strong></h4>
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	With pension plans, there are some benefits as mentioned below:</div>
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	<strong>Guaranteed income</strong></h4>
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	Under the ambit of a pension scheme, you get a fixed amount of income for your retirement planning. However, there is also an option to provide income to your spouse in case of your death.</div>
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	<strong>Death benefit</strong></h4>
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	Pension schemes also provide a death benefit plan for the financial security of your family in your absence. The nominee will receive the sum assured or death benefit after your death. However, if the pension fund scheme is discontinued due to some reason, the already accumulated amount in the policy will be given to the beneficiary.</div>
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	<strong>Flexible premium payment terms</strong></h4>
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	Depending upon your financial goal, there is also the flexibility to select the premium payment term plan.</div>
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	<strong>A nominee has three options to use the pension funds:</strong></div>
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	&mdash; Buy an immediate annuity plan with the entire proceeds</div>
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	&mdash; Withdraw the entire death benefit</div>
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	&mdash; Partially withdraw the proceeds and use the balance amount to buy an annuity plan</div>

National Pension Scheme (NPS) - Know everything about national pension scheme with Tax benefits, how to plan, benefits, income on death and options for the kind of investment. Get latest news and headlines on National pension scheme with business-satandard.com

Page 8 - Latest Updates on pension scheme

Cabinet clears pension scheme for senior citizens with 8% return

Cabinet approves Pension Schemes of 2003, 2014