NPS Scheme Details and its Benefits

[Srini]

   

Why NPS  ( National Pension Scheme) suits for you ?

• It is voluntary - A Subscriber can contribute at any point of time in a Financial Year and also change the amount he wants to set aside and save every year.
  
• It is simple - Subscriber can open an account at the nearest CSC
  
• It is flexible - Subscribers can choose their own investment options and pension fund and see their money grow.
  
• It is portable - Subscribers can operate their account from anywhere, even if they change the city and/or employment.
  
• It is regulated - NPS is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS Trust.
  

NPS notified on 22nd Dec 2003 for central government employees joining service on or after 1st Jan 2004 and replaced existing defined benefit pension.
NPS has been adopted by almost all the States for its employees.
NPS was extended to all citizens of Indian on voluntary basis from May 2009.
NPS has been adopted by the Corporates for its employees.
NPS was extended to NRI / OCI (repatriable or non-repatriable basis)

Features of NPS :

1. Low Cost
   
2. Portable Unique PRAN
   
3. Flexible Choices
   
4. Market Linked Returns
   
5. Tax Efficient
   
6. Transparent & Online Access
   
7. Regulated
   

How it Works ?
ENTRY
• Any citizen of India aged 18-65 years 
• Application & KYC submission
• Onboarding through Online or Physical modes

ACCUMULATION

• Regular contributions by self and /or employer
  
• NAV based returns
  
• Investments managed by professional Pension Funds
  

EXIT
Normal at 60 years or superannuation age
• Min. 40% Annuity purchase & Max. 60% lump-sum
• Premature with 80% Annuity purchase & 20% lump-sum
• Partial withdrawal 25% after 03 years with conditions

Types of Account

Tier-I

o Pension Account
o Tax benefits available
o Restrictions on withdrawal
o Min. Contribution Rs. 500
o Min. Contribution per year Rs. 1000
o No limits on Contributions

Tier –II
o Optional Account with active Tier-I
o No tax benefits
o Unrestricted withdrawal
o Min. Contribution to open Rs. 1000
o Min. Contribution Rs. 250
o No limits on Contributions

Partial Withdrawals :
Subscriber should have completed 3 years in NPS
Upto 25% of the contributions made by the subscriber is allowed

Purpose for which partial withdrawal allowed :
✓ Higher education of his/her children
✓ Marriage of his/her children 
✓ Purchase or construction of residential house or flat 
✓ Treatment of specified illnesses (including COVID)
✓ Disability of more than 75%
✓ Skill development/re-skilling or any other self-development activities
✓ Establishment of own venture or any start-ups

 Maximum 3 (three) times during entire tenure


More details can be found at the below attachment.

  NPS Details.pdf (Size: 1.5 MB / Downloads: 172)