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NPS Tier1 CC reward points?

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InvestPotato

Hi, 

I am thinking to create NPS account for first time to save taxes and invest 50k for this year before 31st March


I know that NPS allow CC payment. The cost comes around 0.9% + GST = 1.062%

I wanted to know if I get rewards points for NPS payment? 

I have a spend based offer on my card for 40k+ = 800

If I get reward points on ICICI platinum card. Then it might make sense to pay via CC. (payment amount = 50k)

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Crowdpuller Crowdpuller
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Hdfc used to block the cards ….Check before using

Deal Subedar Deal Subedar
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Have got rewards points for IDFC credit card. Sorry not sure about ICICI. Also if it is spend based offer, better to check with customer care since TnC might be different

PS: Contributed to Tier 1. Not sure if that makes a difference

Cool Cool
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I used amex (this year) and hdfc (last year) to utilise spend based reward successfully.
They won’t block account on 50k spends(I’m using mix of amex and hdfc from last 3 years for 50 to 60k/year for nps). Loads of people were misusing it to rotate money using tier 2 accounts who got banned.
Never tried ICICI as rewards points are pretty less even to cover the transaction charge normally.

Deal Subedar Deal Subedar
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I have used recently axis ace CC for NPS and should be getting Cashback soon.

Deal Subedar Deal Subedar
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used rbl card , received rewards

Deal Subedar Deal Subedar
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I am getting net 0.75 cashback on my FK axis card. If Ace, then 1.25% net.

Deal Subedar Deal Subedar
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SnippierJoker wrote:

I used amex (this year) and hdfc (last year) to utilise spend based reward successfully.
They won’t block account on 50k spends(I’m using mix of amex and hdfc from last 3 years for 50 to 60k/year for nps). Loads of people were misusing it to rotate money using tier 2 accounts who got banned.
Never tried ICICI as rewards points are pretty less even to cover the transaction charge normally.

How much maintainance fees are you paying?

How is the portfolio growing?

In dilemma if I should open NPS account or not? 
I won’t get the money back till 60 years of age.

Deal Cadet Deal Cadet
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InvestPotato wrote:

How much maintainance fees are you paying?

How is the portfolio growing?

In dilemma if I should open NPS account or not? 
I won’t get the money back till 60 years of age.

If it’s purely for tax purposes, it’s not worth it because of the lockin period. Net net if you’re young you’ll benefit more by paying tax instead of NPS

Critic Critic
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InvestPotato wrote:

How much maintainance fees are you paying?

How is the portfolio growing?

In dilemma if I should open NPS account or not? 
I won’t get the money back till 60 years of age.

Invest only in Tier I and only if you are in higher tax bracket and 50K only. For someone in 30% tax level, investing 5K immediately gives 15.6K back in the form of reduced tax. If the net payment is considered, NPS gives 20-25% return on the long run.

NPS has the lowest AMC among all mutual funds. 

Budding Star Budding Star
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jain01010199 wrote:

If it’s purely for tax purposes, it’s not worth it because of the lockin period. Net net if you’re young you’ll benefit more by paying tax instead of NPS

How to claim 50k NPS over and above 80c?
Under which section?

Genius Genius
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BAT_MAN wrote:

How to claim 50k NPS over and above 80c?
Under which section?

80CCD(1B)

Cool Cool
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InvestPotato wrote:

How much maintainance fees are you paying?

How is the portfolio growing?

In dilemma if I should open NPS account or not? 
I won’t get the money back till 60 years of age.

I never really looked at it. I just put 50k and forget about it as it’s a long term thing.

I am just doing it for the sake of tax purpose due to 30% tax slab not as a retirement fund or a sort of investment.

50k/year is not goona give me a good enough retirement amount anyways and the stupid 60-40 withdrawal rule even after 60 years is dumb.

Deal Cadet Deal Cadet
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BAT_MAN wrote:

How to claim 50k NPS over and above 80c?
Under which section?

80ccb or 80ccd i don’t remember one of these

Deal Subedar Deal Subedar
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Not related to the original question but if you are looking for some related discussion recently at https://www.desidime.com/discussions/nps-accoun...

Have invested 50K per year for Section 80 CCD ( 1B ) and 10% if basic salary if salaried employee and employer supports it( in addition to EPF) under Section 80 CCD ( 2 )

As others mentioned, it is a long term investment and mostly available at annuity period. Have active choice with 70( E ), 20( G ), 10( C ) currently and probably returned 15% XIRR in last 5 years

Also I think you can do minimum investment of Rs. 500 in Tier 1 in case you want to not contribute in between for any reason and there is Tier 2 too though without tax benefits and just to explore

Just sharing my 2 cents. Sorry again if not relevant to your original question.

Deal Subedar Deal Subedar
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SnippierJoker wrote:

I never really looked at it. I just put 50k and forget about it as it’s a long term thing.

I am just doing it for the sake of tax purpose due to 30% tax slab not as a retirement fund or a sort of investment.

50k/year is not goona give me a good enough retirement amount anyways and the stupid 60-40 withdrawal rule even after 60 years is dumb.

Make sense.  

No point of creating corporate NPS rather invest yourself for 15,600 tax benefits.

Cool Cool
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InvestPotato wrote:

Make sense.  

No point of creating corporate NPS rather invest yourself for 15,600 tax benefits.

Yepp, if you are in higher tax bracket and have exhausted all other tax saving option then you can put 50k in nps to save some tax as I do not see it as a loss. But if you have other option still available then those will be better.

I have 1.2L in ELSS, 30k in ppf and 50k for nps yearly to reach my 2L tax saving investment limit. Do not care about nps in any other way.. yum

Deal Cadet Deal Cadet
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Random123 wrote:

Not related to the original question but if you are looking for some related discussion recently at https://www.desidime.com/discussions/nps-accoun...

Have invested 50K per year for Section 80 CCD ( 1B ) and 10% if basic salary if salaried employee and employer supports it( in addition to EPF) under Section 80 CCD ( 2 )

As others mentioned, it is a long term investment and mostly available at annuity period. Have active choice with 70( E ), 20( G ), 10( C ) currently and probably returned 15% XIRR in last 5 years

Also I think you can do minimum investment of Rs. 500 in Tier 1 in case you want to not contribute in between for any reason and there is Tier 2 too though without tax benefits and just to explore

Just sharing my 2 cents. Sorry again if not relevant to your original question.

@Random123 Is 10% of basic, which is employer contribution under Section 80CCD(2), over and above the 1.5L of Section80C and 50k of Section 80CCD(1B)?

Deal Cadet Deal Cadet
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MrMonkey wrote:

@Random123 Is 10% of basic, which is employer contribution under Section 80CCD(2), over and above the 1.5L of Section80C and 50k of Section 80CCD(1B)?

Yes, that is above all, 14% contribution in case of govt(center,state) as employer.

Deal Subedar Deal Subedar
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MrMonkey wrote:

@Random123 Is 10% of basic, which is employer contribution under Section 80CCD(2), over and above the 1.5L of Section80C and 50k of Section 80CCD(1B)?

https://cleartax.in/s/section...cd

Hi, yes it is over and above other tax deductions. I think it is until 14% for government employees and 10% for others

Deal Subedar Deal Subedar
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Random123 wrote:

https://cleartax.in/s/section...cd

Hi, yes it is over and above other tax deductions. I think it is until 14% for government employees and 10% for others

Tax benefits availed under Section 80CCD cannot be claimed again under Section 80C, i.e. the combined deduction under Section 80C and 80 CCD cannot exceed Rs 2 lakhs.

Deal Subedar Deal Subedar
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InvestPotato wrote:

Tax benefits availed under Section 80CCD cannot be claimed again under Section 80C, i.e. the combined deduction under Section 80C and 80 CCD cannot exceed Rs 2 lakhs.

Hi yes, I think it is 2 lakhs for Section 80C and Section 80 CCD (1). But Section 80 CCD (2) is over and above these two

Copying from the article

Employer’s contribution to NPS is allowed as deduction under section 80CCD(2) while computing total income of the employee. However, the amount of deduction cannot not exceed 14% of salary in case of central (and state from this budget) government employees and 10% in case of any other employee. There is no ceiling on the amount of deduction for employer’s contribution. And the deduction is available over and above the limit of Rs 1.5 lakh and Rs 50,000 under section 80CCD(1) and 80CCD(1B).

Deal Subedar Deal Subedar
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Random123 wrote:

Hi yes, I think it is 2 lakhs for Section 80C and Section 80 CCD (1). But Section 80 CCD (2) is over and above these two

Copying from the article

Employer’s contribution to NPS is allowed as deduction under section 80CCD(2) while computing total income of the employee. However, the amount of deduction cannot not exceed 14% of salary in case of central (and state from this budget) government employees and 10% in case of any other employee. There is no ceiling on the amount of deduction for employer’s contribution. And the deduction is available over and above the limit of Rs 1.5 lakh and Rs 50,000 under section 80CCD(1) and 80CCD(1B).

Section 80CCD relates to the deductions available to individuals against contributions made to the National Pension Scheme (NPS) or the Atal Pension Yojana (APY). Contributions made by the employers towards the NPS, also come under this section. NPS is a notified pension scheme from the Central Government.


CCD constitutes 

1. CCD (1)

2. CCD (1B)

3. CCD (2)

Limit of 80CCD and 80C together is 2 Lakh

Deal Subedar Deal Subedar
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InvestPotato wrote:

Section 80CCD relates to the deductions available to individuals against contributions made to the National Pension Scheme (NPS) or the Atal Pension Yojana (APY). Contributions made by the employers towards the NPS, also come under this section. NPS is a notified pension scheme from the Central Government.


CCD constitutes 

1. CCD (1)

2. CCD (1B)

3. CCD (2)

Limit of 80CCD and 80C together is 2 Lakh

Sorry I don’t understand if you are referring to any particular point

EDIT: Section 80C and Section 80CCD (1) together has limit of Rs. 2 lakhs

Section 80CCD (2) covers the employer’s NPS contribution, which will not form a part of Section 80C. This benefit is not available for self-employed taxpayers. The maximum amount eligible for deduction will be the lowest of the below:

  • Actual NPS contribution by employer
  • 10% of Basic + DA
  • Gross total income

Ref: https://cleartax.in/s/nps-national-pension-...me

Deal Cadet Deal Cadet
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SnippierJoker wrote:

Yepp, if you are in higher tax bracket and have exhausted all other tax saving option then you can put 50k in nps to save some tax as I do not see it as a loss. But if you have other option still available then those will be better.

I have 1.2L in ELSS, 30k in ppf and 50k for nps yearly to reach my 2L tax saving investment limit. Do not care about nps in any other way.. yum

Is this investment still make sense for New tax regime?

Cool Cool
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vk6 wrote:

Is this investment still make sense for New tax regime?

I am still on old tax regime as I can show the deductions and investments and pay less taxes.

New tax regime is not really useful for me as my tax liability will be much higher if I switch.

Deal Subedar Deal Subedar
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FYI, i got my Cashback for Axis Ace NPS contribution in Jan. So still working well.

Deal Subedar Deal Subedar
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Random123 wrote:

Sorry I don’t understand if you are referring to any particular point

EDIT: Section 80C and Section 80CCD (1) together has limit of Rs. 2 lakhs

Section 80CCD (2) covers the employer’s NPS contribution, which will not form a part of Section 80C. This benefit is not available for self-employed taxpayers. The maximum amount eligible for deduction will be the lowest of the below:

  • Actual NPS contribution by employer
  • 10% of Basic + DA
  • Gross total income

Ref: https://cleartax.in/s/nps-national-pension-...me

Edit – I think I was wrong - https://cleartax.in/s/taxability-on-nps-employe...

Deal Subedar Deal Subedar
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Hi, sorry if I wasn’t clear. Have been doing nps contribution by employer for last couple of years, hence mentioned it

Deal Subedar Deal Subedar
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Random123 wrote:

Hi, sorry if I wasn’t clear. Have been doing nps contribution by employer for last couple of years, hence mentioned it

So total tax benefits only from NPS

= 50k + contribution from employer

(Btw, do i need to match employer contribution as the case in EPF?)

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