Well, as you would know, under section 80CCD, an additional Rs. 50,000 of investments in National Pension Scheme or NPS can be claimed for tax deduction. Basically, you do not have to pay tax on investment upto Rs. 50,000 in NPS.
So, my friends have been calling me asking “Should I invest in NPS? There is an additional tax saving on Rs. 50,000 of investment.”
My simple answer to them is “I would not invest in NPS“, to which I receive surprised uhhs, ahhs and a variety of other expressions. In some cases, they strongly put forth their arguments as to why I am wrong.
It is amazing that tax savings still continue to drive our investment decisions. In this case too, the die hard fans of NPS are actually not the fans of NPS, but merely hunters of more tax benefit.
The ‘bhakts’ of this benefit leave no stone unturned to make you believe that this is the best reason that one should invest in a high lock-in product like NPS.