Now is the time of year when we must make some tax declarations. A new financial year is starting in India, and we have to submit tax declarations to my office so that they can deduct the money accordingly before crediting my salary. From this year onwards, they have introduced a new scheme to add funds directly from the employer to NPS. This brings a lot of advantages.
Passive income as pension
Many people have different opinions on this. Many people say that this is not a good investment because we get better and bigger returns from SIP and Mutual funds. I agree with their points, but I see this NPS as yet another source of passive income. Apart from the other Passive income sources that I can think of, having a stable Pension after retirement or after a particular age is a good thing to have.
Tax savings
The next attractive thing here is that we can get some tax savings if we invest in NPS schemes. 10 percent of the basic salary is taken for this, and for people on new tax regimes, up to 14 percent of the basic salary can be contributed for this scheme. Only after we start getting a Pension from this will we get to understand the importance of these funds. I wish I had known about this sooner so that I would have invested some small amount there to start with during my early days of employment.
Multiple passive income sources
When we think about retirement, having multiple sources of passive income is very important. We cannot completely rely on just one income alone. Let's say if something happens to that regular source of income, at least the next income type will help us out. People might have a salary, pension, dividends, and rental income as their income from multiple sources. All these are very good, and as long as we have diversified sources of passive income, we are financially very safe, and we can even take risks even after retirement.
Mixed thoughts on NPS
When I consulted with multiple people on this, I got mixed reviews, but I was sure on one thing in my mind. I wanted to have another source of passive income. I only have a few more years in my journey, I would like to create multiple income streams so that I can be safe and secure after I retire and live on the passive income source without needing to work. For different people, NPS can work differently. Any schemes like this can work for some people and may not work for others. It is good to do a self-assessment before giving it a try. But I'm glad that I decided what I want and got into NPS today.
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