Difference between NPS and OPS
What is the Old Pension Scheme ?
The Old Pension Scheme is basically a General Provident Fund (GPF) facility. Under this, there is no deduction from salary which is there for pension. According to this scheme, 50% of last salary is guaranteed to employees on retirement. The entire pension is provided by the government of India.
Old pension scheme was in effect until December 2003. It was then removed by the Bharatiya Janata party. NPS(New Pension Scheme) was launched instead which came into effect from April,2004.
Recently, The states of Rajasthan and Chattisgarh restored the old pension scheme.
What is NPS?
NPS or New Pension Scheme is a two-tier contribution-based system through which one can decide where to invest their money. There are four ways to invest in NPS: equity, debt, bonds, and alternative investment funds. Initially, NPS came into existence keeping in mind the employees for their tax-free withdrawals, but later on, it became available to all Indian citizens between the ages of 18 and 65.
Difference between NPS and OPS?
OPS
- Assured returns are provided.
- Income post-retirement is tax-free.
- Required government to revisit the priorities.
NPS
- Investments in securities like equities but no return assurance is provided.
- 60 per cent tax-free pension fund for retirement on redemption, rest to be invested in the annuity (taxable)
- No requirement to revisit again and again.
How does PensionBox fit into this picture?
With PensionBox you can invest in the National Pension Scheme, with utmost flexibility and facilitate your personalised retirement. You can track, pause, and invest whenever and wherever you want with just a few clicks.
Now that you have reached this point, we strongly encourage you to start planning your dream retirement. The earlier you save, the more your save! Sign Up and download the app on Android and on IOS.
PensionBox simplifies the National Pension System(NPS), the government's pension scheme for private employees both for retail users and HRs/companies.
If you don’t have an NPS account, you can simply open your pension account within 2 minutes and if you have NPS PRAN already, you will be able track, invest and manage everything free of charge with best user experience.
We never touch or hold your money directly, your investments go safely to your chosen pension fund through approved channels.
We are built with Zerodha as POP , ensuring transparency, data security, and peace of mind. Your retirement savings are protected by regulation and secured by technology.
That’s why, PensionBox brings transparency, zero charges, timely support and freedom to select any pension fund so that you get the best experience investing in NPS & be better future ready.
That’s not it, we help you & your company together to maximise contribution and tax savings with minimal charges & best user experience.
If you are an existing zerodha user then you get a fast login or sign up using kite ID.
Once you are onboarded with kite ID, you get free access to
- Open NPS in 2 minutes
- Track existing NPS
- POP shift or CRA shifting
- Invest in one time or create SIP in NPS
- Withdraw NPS requests & instant withdraw tier 2
- Create your dream retirement plan
- Open NPS Vatsalya for your kid
- Share with HR (To unlock more tax benefits)
- Employer Contribution:
- Contributions made by your employer to your NPS account are tax-free up to 14% of your basic salary under Section 80CCD(2). Do connect us with your HR to enable this for you.
Tax Benefits in Old Tax Regime - Self-Contribution:
- Deduction up to ₹1.5 lakh under Section 80C.
- Additional deduction of ₹50,000 under Section 80CCD(1B) — exclusive to NPS investments!
- This allows you to claim a total deduction of up to ₹2 lakh every year on your NPS contributions.
- Employer Contribution:
- Contributions made by your employer to your NPS account are tax-free up to 10% of your basic salary (Basic + DA) under Section 80CCD(2). Do connect us with your HR to enable this for you.
- This is over and above your personal deduction limits, giving you extra tax efficiency.
Feel free to book a free call to learn more about NPS, NPS Vatsalya, Corporate NPS & PensionBox or contact the support team.
