I do not like NPS, as I think it is a technically flawed product. What is the technical flaw? It is a GOI product and to me that is too risky.

I am happy to stay with one GOI product named PPF, so why should I choose one more?

Good question.

However if I have a huge income and the willingness to put away another Rs. 50k a year maybe I should look at it.

Personally, I DO NOT HAVE A NPS ACCOUNT, and this happened after I did some work with some of the people working there. You could of course call it information bias….

I do not like the small portion in equities for the youngsters (age 22 to age 50), I do not like a compulsory annuity (I will accumulate outside for buying annuity, why through Nps?), I know i will get a sub optimal taxable pension. Why should I pay tax on a pension amount when I can withdraw from an equity fund?

Here are 2 articles one by msm saying ‘you should invest in NPS and another article saying you should not invest. That article is of course by Pattu!!

http://economictimes.indiatimes.com/wealth/savings-centre/analysis/budget-2015-heres-why-you-should-invest-in-new-pension-system-now/articleshow/46483165.cms?curpg=3

and here is Pattu’s post

http://freefincal.com/do-not-invest-rs-50000-in-nps-for-saving-tax/

another brilliant friend

http://www.dineshgopalan.com/2015/03/the-new-nps-rules-and-tax-saving_94.html

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  1. Should you invest in NPS? NO

    why?

    providing income tax relief via NPS is a red flag. Done primarily to lure large middle class to boost the NPS corpus with tax sops.

    again why redflag?

    simple math: 50k * 35 million tax payers = roughly 1 trillion INR into the NPS ripe for anybody’s taking

    quote1: Indian government unveiled plans on Thursday to invest $137 billion in its decrepit rail network over the next five years

    quote2: Prabhu,… said he would raise funds from …pension funds!

    caveat emptor

  2. “It is a GOI product and to me that is too risky.”

    Can you please elaborate on why you consider a GOI product as too risky? Shouldn’t it be the other way round where there is more trust on a GOI product?

  3. @krod,

    It is because GoI is an irresponsible promoter as well as an irresponsible handler of public money (using it for giving freebies instead of creating sustainable investments).

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