NATIONAL PENSION SCHEME
Home / NATIONAL PENSION SCHEME

National Pension Scheme (NPS)

NPS is a pension scheme for Citizens of India (including NRIs). The scheme allows individuals to invest in a pension account at regular intervals during their employment regulated by Pension Fund Regulatory and Development Authority (PFRDA). A unique PRAN card would be given to each person stating their retirement account number.

NPS offers two types of accounts, namely Tier-I and Tier-II. Tier-I account is the pension account having restricted withdrawals. Tier-II is a voluntary account which offers liquidity of investments and withdrawals. It is allowed only when there is an active Tier-I account in the name of the subscriber. The contributions accumulate over a period till retirement grows with market linked returns.

Link Name

On exit/retirement/superannuation, a minimum of 40% of the corpus is mandatorily utilized to procure a pension for life by purchasing an annuity from a life insurance company and the balance corpus is paid as lumpsum.

NPS platform offers different models to suit the different segments of users.


Contribution Withdrawals Fund Options Auto Choice Tax Benefit
Annual Contribution Requirement

Tier I – Rs.500 and Tier II – Rs.1000. No Maximum Limit on Investment.

Minimum one contribution in a Financial Year. 		Withdrawal amount will not exceed 25% of the contributions made by the Subscriber.

Withdrawal can happen a maximum of three times during the entire tenure of subscription. 		Equities, Corporate Bonds, Government Securities & AIF Automatic Investment across the different funds according to subscriber’s age. Over & Above 80 C Limit

Employee’s Contribution - Up to Rs. 50,000 under section 80 CCD (1B)

Employer’s Contribution - Under Section 80 CCD(2)

Advantages


  • Flexibility in Contribution.
  • Liquidity Option & Low Cost.
  • Additional Tax benefit, over and above 80C Limits!
  • Choice of Investment through 4 Fund Options – Scheme E, C, G, A
  • Long term goals as retirement require disciplined savings.
  • Regulated by PFRDA