National Pension System (NPS) is a defined contribution pension system introduced by the
Government of India as a part of Pension Sector reforms, with an objective to provide social
security to all citizens of India.
Transaction Slab(in Rs.) Revised Service Charges (in Rs.) using channels IMPS/UPI
Eligibility All Citizens of India
Age Individuals aged between 18-65 years
Already covered under
Eligible to subscribe
any pension scheme
Tier I – Pension account (Tax benefit available under this a/c)
Mandatory Account
Two Tier Structure
Tier II – Investment account (Anytime withdrawable corpus without
any tax benefit - Optional Account
Minimum Contribution Tier I – Rs.500
during A/C opening Tier II – Rs.1,000
Minimum total Tier I – Rs.1,000 (Min. amount per contribution Rs.500)
contribution in a year Tier II – N.A. (Min. amount per contribution Rs.250)
(i) A partial withdrawal of accumulated pension wealth, not exceeding
Part Withdrawals under 25% of the employee contributions, after a lock in period of 10 years.
Tier I (ii) Allowed to withdraw only a maximum of three (3) times with a gap
of 5 years during the entire tenure.
1. On attaining age of 65 years:
a. 60% of the corpus can be commuted/withdrawn in lump sum
anytime up to the age of 70 yrs
b. Minimum of 40% of the corpus needs to be invested in a ‘Annuity
Exit Option under Tier I Scheme’
2. Before 65 years of age:
a. 20% of the corpus can be withdrawn in lump sum
b. 80% of the corpus will be invested in a ‘Annuity Scheme’
Tax Benefit
I. Exclusive Tax Benefit u/s 80CCD (1B)
Exclusive tax benefit available to NPS subscribers on investments up to Rs.50,000 u/s 80CCD
(1B) of Income Tax Act, 1961
II. Tax Benefit u/s 80CCD (1)
For Salaried Individual - Investment up to 10% of Salary (Basic + Dearness Allowance)
is deductible from taxable income u/s 80CCD (1) of Income Tax Act, 1961 subject to 1.5
lakhs limit of section 80C
For Self Employed Professionals - Investment up to 10% of Gross Annual Income is
deductible from taxable income u/s 80CCD (1) of Income Tax Act, 1961 subject to 1.5
lakhs limit of section 80C
Some of other key benefits of NPS:
Investment choice – NPS offers choice of Investment Options, Pension Fund Managers,
Annuity Service Providers and Annuity Plans to Subscribers.
Switching facility – NPS offers choice of switching the Service Provider, Investment
Option and Pension Fund Manager.
Superior returns compared to other pension products – Market linked returns
Low Cost – One of the World’s least cost investment options with 0.01% as Fund
Management Charge.
Portability of NPS Account – NPS account remains the same irrespective of change of
geography or employment.
Flexible contributions – Amount and frequency of contributions can be altered by
subscriber.
Continuation in NPS scheme post retirement – Provision to defer withdrawal and to make
contributions in the NPS account upto the age of 70 years.
Well regulated - NPS is regulated by Pension Fund Regulatory and Development
Authority (PFRDA).
Online access to NPS account – Online access to NPS account at NSDL.
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