What's the case against NPS tier 2?

[darstone]

@raulcraven Hi, This is cool and I'm just learning. I'm curious about tax savings through 80C. I read this online:

The contribution made towards NPS Tier II Account is not eligible for any taxation benefits, unless you are a central government employee and have claimed deduction under Section 80C for contribution made towards Tier II account in which case the money so deposited will have a lock in of three years

Can you please also confirm a private sector employee cannot get 80C tax saving benefit even if I'm willing for a 3 year lock-in?

 

[raulcraven]

@darstone Tier 2 has no tax benefits

 

[mcbrae]

@raulcraven How has your return been? Hope there is a significant history to compare it with a simple index fund.
Can someone do some DD on the nav history of NPS II?

I too use NPS II to park some extra cash. Returns are better due to equity exposure. But need to dive deep to decide if it's a smart choice

 

[proverbsmom]

@raulcraven You can withdraw all the fund/amount but there is no way to close the account.

You can't reach out to customer support which is non-existent. Biggest downside is lack of support in my opinion. If by chance you are stuck then you are.

 

[broloach]

@raulcraven Arbitrary govt taxation, and policy changes

 

[ger]

@raulcraven As of Oct 2022-,20/10/2022,-Circular%20on%20allowing), NPS tier 2 allows you to put 100% amount in equity, isntead of the earlier 75%. With 100% in equity, it is exactly like a MF. So it will be taxed like one