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NPS has a tax edge, but watch out for annuities

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NPS has a tax edge, but watch out for annuities

The New Pension Scheme (NPS) is likely to get a makeover if the revised Direct Tax Code is implemented. However, the government is doing its bit tolure investors to take a close look at the NPS. Recently, the government announced the ‘Swavalamban’ scheme through which it would add Rs 1,000 co-contribution every year for the next three years for everyone who joins the New Pension Scheme in this financial year. Any NPS subscriber who invests Rs 1,000-12,000 per annum between April 1, 2010 and March 31, 2011, will get Rs 3,000 free from the government.

The likely DTC impact

The revised DTC, if implemented without any changes, will keep the NPS out of the tax net. This new change will make the NPS an attractive investment opportunity. The government has proposed EEE (exempt-exempt-exempt) method of taxation for NPS, which implies the NPS will be exempt from taxes at all the three stages of deposit, appreciation and withdrawal. Earlier, the NPS proceeds were taxable at maturity.

Advantages

One of the major advantages is also the lowest fund management charge, which is Rs 99 per lakh (0.0009%) compared to charges of a pension plan offered by an insurance company, which is around 0.75-1.75% per year. This low-cost structure makes it more attractive than most annuity/pension plans offered by insurance companies, financial advisors say. The custodian charges are in the range of 0.0075% to 0.05%. Despite all charges, the cost of investment is cheaper than charges of mutual find and ULIPs.

How does it work?

Investors have an option to choose their investment mix among three categories. The first one (E) refers to high investment exposure in equity, which targets investors with a high risk appetite. Equity investment, however, is capped at 50%, which mainly comprises index funds. The second option (C) is high exposure in fixed income instruments, which targets investors of a moderate risk profile. These instruments include liquid funds, corporate debt instruments, fixed deposits and infrastructure bonds. The last option is pure fixed investment products (G) which offer low returns. Ideally, you should start investing for your retirement in your early thirties. If you have the advantage of longer investment horizon (20 years plus), equity is the best option to start with. But in the case of the NPS, you have to buy a life annuity offered by life insurance companies. The NPS requires the investor to use the retirement corpus to buy annuities to avoid taxation. As per the existing stipulations, you have to invest 40% of the corpus in annuities.

Other alternatives

Annuity plans which don’t return the purchase price offer 8-9% and the ones that return the purchase price offer 50% a year are other options. Any bank deposits over five years, which offered 10% a couple years ago, offer around 8-8.5% today because of a decline in interest rates. There are other assured monthly income options like the Senior Citizens’ Savings Scheme (SCSS) which offer 9%, PPF at 15% and the post office monthly income scheme at 8%.
Courtesy : Economic Times

LATEST DEFENCE CANTEEN (CSD) PRICE LIST OF VARIOUS MANUFACTURERS

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Latest price list has been published in the website of www.govtempdiary.com, this content would be very informative for civilian defence employees who has eligible to purchase such kind of articles from Defence Canteen.
We reproduce the full text of the price list and given below...

PRICE LIST BASED ON CHENNAI CSD

(Note:The prices of all products are subject to change. Check the prices at CSD,Chennai)

WHIRLPOOL PRODUCTS

Index No.

Item Description

Price Rs

67043

Ref.180 ltrs.New Supreme

7161

67046

Ref. 180 ltrs. New Royal

8715

67045

Ref.200 ltrs Furi 21 Pre

17829

67049

Ref.230 ltrs. Furi 24 pre

11705

67028

Ref.Professional 310 ltrs.Elite/FF/32

20263

67014

Ref.310 ltrs. Single Door CFC

9538

67031

Ref.Professional 340 ltrs.Elite/FF/35

11520

CSD PRICE LIST OF WASHING MACHINE

Index No.

Item Description

Price Rs

21650

W/M Supreme Wash SSAN 651/LG

6181

21651

W/M White Magic S70 7Kg

7583

21652

W/M Super Wash SSAN 652/LG

6634

21648

W/M White Magic FP-60 DLX

9826

21649

W/M Splash Auto F/Auto

9090

21653

W/M White Magic PRO 700S T/C

13130

21654

W/M White Magic PRO 700H T/C

14369

CSD PRICE LIST OF HERO HONDA

Index No.

Item Description

Price Rs

63074

H/Honda cd deluxe Cast Wheel

30943

63046

H/Honda Passion Pro

37912

63048

H/Honda Super Splendor Drum S/S

39385

63049

H/Honda Glamour (Drum)

40641

63105

H/Honda Splendor Plus (Spokes Wheel)

33442

63045

H/Honda CBZ Xtreme KS 150CC

63006

Scooter Honds/D10 4sp.

34513

63009

Honda Shine 125CC Kich

39584

63010

M/Cycle Unicon (Self) Alloy wheel

53178

SAMSUNG PRODUCTS
CSD PRICE LIST OF COLOR TELEVISION

Index No.

Item Description

Price Rs

21914

CTV 21 K44 Pure Flat

5757

21915

CTV 21 S8

7070

21916

CTV 21 K55 Pure Flat

5707

21917

CTV 29 K44 Pure Flat

10090

21918

CTV 29 T40 Pure Flat

13332

21919

CTV CS21 K45 Pure Flat

5404

22484

CTV LCD LA22B 450

12397

22490

CTV LCD LA26B 450

18960

22491

CTV LCD LA32B 450

24064

22495

CTV CS 21A 530

5959

CSD PRICE LIST OF WASHING MACHINE

Index No.

Item Description

Price Rs

21519

W/M WA 80R4G F/A 5.8Kg

8260

21584

W/M WA 8503 Semi/Auto 6.5Kg

5862

21585

W/M WA 85TPL F/A 6.5Kg

11015

CSD PRICE LIST OF AIR CONDITIONER ( A/C)

Index No.

Item Description

Price Rs

67132

Window A/C AW T12 1Ton Remote

11042

67137

Window A/C AW T18 FIMD 1.5Ton Remote

12120

67138

Window A/C AW T24 2Ton W/Remote

15712

67253

Split A/C AST-18 1.5Ton

17148

67254

Split A/C AST-24 2Ton

21546

CSD PRICE LIST OF REFRIGERATORS

Index No.

Item Description

Price Rs

67001

Ref. RA18 NFO 170ltrs

7525

67025

Ref. RT31 IV F/F 315 ltrs.

14746

67026

Ref. RT34 IIV F/F 330 ltrs

16160


CSD PRICE LIST OF SUZUKI MOTORCYCLE INDIA PRODUCTS

Index No.

Item Description

Price Rs

63132

M/Cycle Suzuki GS 150

54014

63133

M/Cycle Suzuki GT 125(A.Wheel) Heat

33101

63134

M/Cycle Suzuki GS 125 XU-Zeus

36704

63138

M/Cycle Suzuki UZ125 (Auto Self) Gearless

39396

63135

M/Cycle Suzuki GS125 XDU Zeus Drum Spokes Wheel/Self

38716


Source : Govtempdiary

Delhi govt employees health scheme simplified

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Delhi govt employees health scheme simplified

Sitting and former MLAs of Delhi as well as senior government employees will now be able to avail medical facilities in reputed private hospitals at government expenses without any hassle.

Delhi Cabinet, presided over by Chief Minister Sheila Dikshit, today approved certain modifications in Delhi Government Employees Health Scheme (DGEHS) simplifying procedure for getting treatment at empanelled private hospitals.

The DGHS was launched by Government in April, 1997.

Health Minister Kiran Walia said the modifications have been made to ensure hassle-free medical facilities to senior government officers, MLAs and former MLAs at private hospitals.

"As per existing norms, if somebody wants to get admitted into a private hospital, he has to be referred to the private hospital by a government hospital. There are certain other procedural bottlenecks also. The modifications aim to do away with all these," Walia said.

"It was felt that still there are certain provisions which need to be amended to ensure better healthcare to the beneficiaries," she said.
PTI


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