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National Pension System (NPS) Exit from NPS (Closing NPS Account)
NPS is a pension scheme regulated by Pension Fund Regulatory Customer can exit from the scheme after 10 years of account
& Development Authority (PFRDA). opening or attaining 60 years of age whichever is early. The
exit proceeds depend on the age of exit as shown below:
Who can join NPS? Exit before 60 years of age Exit on 60 years of age
A Citizen of India including NRI between age group of 18 and Up to 20% of corpus is made Up to 60% of corpus is made
65 years can join this Scheme. OCI, PIO and HUF cannot join available for withdrawal. available for withdrawal.
NPS. Balance needs to be invested Balance needs to be invested
in annuity in annuity
How NPS works?
Upon joining NPS, Customer is allotted NPS account number
called Permanent Retirement Account Number (PRAN). Investment in Annuity
Customer contributes towards NPS to accumulate corpus for Upon exit from NPS customer can select any of the life
retirement during his / her working life which can be utilized Insurance companies registered with PFRDA to get monthly
to get monthly pension post retirement. Customer can pension. Customer also gets a choice of Annuity scheme
continue with NPS Scheme till the age 70 years after joining it.
Tax treatment on exit from NPS
Exclusive Tax benefit over 80C limit
Exit before 60 years of age Exit on 60 years of age
An individual (Salaried as well as Self Employed) can invest
up to Rs. 50,000 in NPS. This amount is eligible for tax Amount withdrawn in lump 60% of Corpus withdrawn in
deduction u/s 80CCD (1B) of Income Tax Act, 1961 over and sum is tax exempt. lump sum is tax exempt.
above 1.5 lakh benefit u/s 80C. Amount invested in Annuity Amount invested in Annuity
is tax exempt. is tax exempt.
Investment of Funds under NPS Amount received as pension Amount received as pension
Investment will be management by HDFC Pension is treated as income and will is treated as income and will
Management Company Limited. There are 4 funds – Equities, be taxed appropriately. be taxed appropriately
Corporate Bonds, Government Securities and Alternate
Investment Funds also knows as asset classes E, C, G and A. Death benefits
Customer gets choice of two investment approaches: In case of death of Customer, nominee / legal heir can claim
Active Choice – Under this option, Customer can the entire Corpus
select asset allocation across E, C, G and A. Maximum
exposure to E is restricted to 75% of Contribution Charges under NPS
amount and A is 5 % of the contribution amount. Please refer annexure 2
Auto Choice – Under this option investment across
three funds is done as per the pre-defined ratio within How to open NPS account
asset classes E, C and G which is linked to the age of Please submit the below documents for NPS account opening:.
Customer. Auto Choice is further offers choice Duly filled and signed CSRF form
between the below Life Cycle Funds: One Passport Size Photo
o LC- 75 Aggressive life Cycle Fund Self attested copy of PAN Card
o LC- 50 Moderate life Cycle Fund Self attested copy of Address Proof
o LC- 25 Conservative life Cycle Fund Cancelled Cheque
Contribution cheque of Rs.50,000/- in favour of
Please refer annexure 1 for investment pattern under all 3 life “HDFC Limited Collection account – NPS Trust” along
cycle funds with duly signed NCIS form
NACH Mandate (for set up of Auto Debit from his/her
Partial withdrawal from NPS Bank account towards NPS)
Customer is allowed to withdraw up to 25% of contributed
amount for specific purposes like treatment of critical illness,
child marriage / higher education etc. after 3 years of account
opening. Maximum 3 withdrawals are allowed.
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Annexure 1:
LC 75 (Aggressive Life Cycle) LC 50 (Moderate Life Cycle) LC 25 (Conservative Life Cycle)
Age E C G E C G E C G
< = 35 Yrs 75% 10% 15% 50% 30% 20% 25% 45% 30%
36 71% 11% 18% 48% 29% 23% 24% 43% 33%
37 67% 12% 21% 46% 28% 26% 23% 41% 36%
38 63% 13% 24% 44% 27% 29% 22% 39% 39%
39 59% 14% 27% 42% 26% 32% 21% 37% 42%
40 55% 15% 30% 40% 25% 35% 20% 35% 45%
41 51% 16% 33% 38% 24% 38% 19% 33% 48%
42 47% 17% 36% 36% 23% 41% 18% 31% 51%
43 43% 18% 39% 34% 22% 44% 17% 29% 54%
44 39% 19% 42% 32% 21% 47% 16% 27% 57%
45 35% 20% 45% 30% 20% 50% 15% 25% 60%
46 32% 20% 48% 28% 19% 53% 14% 23% 63%
47 29% 20% 51% 26% 18% 56% 13% 21% 66%
48 26% 20% 54% 24% 17% 59% 12% 19% 69%
49 23% 20% 57% 22% 16% 62% 11% 17% 72%
50 20% 20% 60% 20% 15% 65% 10% 15% 75%
51 19% 18% 63% 18% 14% 68% 9% 13% 78%
52 18% 16% 66% 16% 13% 71% 8% 11% 81%
53 17% 14% 69% 14% 12% 74% 7% 9% 84%
54 16% 12% 72% 12% 11% 77% 6% 7% 87%
> = 55 Yrs 15% 10% 75% 10% 10% 80% 5% 5% 90%
Annexure 2:
Frequency of
Intermediary Charge Head Charges* Mode of deduction
deduction
Subscriber Registration Rs. 200 One time
From the contribution amount /
POP (HDFC Contribution Processing** 0.25%
On each transaction paid by Customer up front
Limited) Non – Financial Transaction Processing Rs. 20
Persistency Charge Rs.50 Per annum
From NPS Account (by cancelling
PRAN Generation Rs.39.36 One time
the units) on the last day of the
CRA (Karvy) Annual Maintenance Rs.59.63 Per annum
calendar quarter
Financial Transaction Processing Rs.3.36 On each transaction
Fund Manager Investment Management 0.01% Recovered through NAV
Per annum
Custodian Asset Servicing 0.0032% deductions
*charges are exclusive GST
**subject to minimum Rs. 20
