National Pension Scheme (NPS)
(A professionally managed pension funds schemes for an Indian and NRI citizens between 18-70 years of age)
National Pension System (NPS) is a pension cum investment scheme launched by Government of India to provide old age security to Citizens of India.It is an excellent tax-saving, investment-cum-saving account for retirement. It brings an attractive long term saving avenue to effectively plan your retirement through safe and regulated market-based return. The Scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA).National Pension System Trust (NPST) established by PFRDA is the registered owner of all assets under NPS.The basic NPS account is called Tier I a/c and Tier II is a voluntary account.
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Opening NPS account has its own advantages as compared to other pension product available. Below are few features which make NPS different from others:
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Low cost product with very low fund management charges
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Tax breaks for Individuals, Employees and Employers: a.Self employed individual is eligible for tax deduction of up to 20% of Gross Income under section 80CCD (1) of Income Tax Act, 1961 within Rs.1.5 Lacs limit under section 80CCE. b.Additional investment of Rs.50,000 will be eligible for tax deduction under section 80CCD (1B) of Income Tax Act, 1961.This is over and above of Rs. 1.5 lacs limit under section 80CCE. c. Further Employee is eligible to claim tax deduction on employer’s contribution upto 10% of salary (Basic + Dearness Allowance) under section 80CCD(2) of IT Act upto 7.5 lacs per annuam.
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Attractive market linked returns
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Easily portable
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Professionally managed by experienced Pension Funds
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Regulated by PFRDA, a regulator set up through an act of Parliament
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Any individual citizen of India (both resident and Non-resident) in the age group of 18-70 years (as on the date of submission of NPS application) can join NPS.
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Opening multiple NPS accounts for an individual is not allowed under NPS. However an Individual can have one account in NPS and another account in Atal Pension Yojna.
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NPS account can be opened only in individual capacity and cannot be opened or operated jointly or for and on behalf of HUF
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Upon successful enrolment, a Permanent Retirement Account Number (PRAN) is allotted to the subscriber under NPS. Once the PRAN is generated, an email alert as well as a SMS alert is sent to the registered email ID and mobile number of the subscriber by NSDL-CRA (Central Record Keeping Agency).Subscriber contributes periodically and regularly towards NPS during the working life to create the corpus for retirement. On retirement or exit from the scheme, the Corpus is made available to the Subscriber with the mandate that some portion of the Corpus must be invested in to Annuity to provide a monthly pension post retirement or exit from the scheme.