The Government of India (GOI) rolled out the NPS for all citizens of India from May 1, 2009 and Corporate sector from December, 2011.
The person (employee/citizen) who joins the NPS will be known as "Subscriber" in the NPS. Under the NPS, each Subscriber will open an account with Central Recordkeeping Agency (CRA) which will be identified through unique Permanent Retirement Account Number (PRAN).
Under NPS, two types of account would be available to subscribers i.e. Tier I & Tier II; Tier I account - where subscribers contribute his / her savings (may include employers contribution in case of Corporate sector) for retirement into a non-withdrawable account, and a Tier II account - a voluntary savings account from which subscribers are free to withdraw their savings whenever he wishes. The facility of Tier II account was made available from December 01, 2009 to All Citizens of India including Govt. employees and Corporate sector subscribers not mandatorily covered under NPS. An active Tier I account will be a pre requisite for opening of a Tier II.
1.It is voluntary - NPS is open to every Indian Citizen. A subscriber can choose the amount he wants to set aside and save every year.
2.It is simple - All the subscriber has to do is to open an account with any one of POPs (Point Of Presence) and get a PRAN.
3.It is flexible - Subscribers can choose their own investment option and pension fund and see their money grow.
4.It is portable - Subscribers can operate their account from any where in the country, even if they change the city, job or their pension fund manager.
5.It is regulated - NPS is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS Trust.
Tax Benefit available for Individual:
Tax Benefit available for Corporate Subscriber:
Exclusive Tax Benefit for any NPS subscribers u/s 80CCD(1B)
If you are an existing subscriber, you can approach any POP-SP or alternatively you can visit eNPS website (https://enps.nsdl.com) for making additional contribution in your Tier I account.
Please note: Tax benefits are applicable for investments in Tier I account only.
The print out of the Transaction Statement could be used as a document for claiming Tax benefit.
At present, interim utilization of pension wealth (such as availing of loan) by the subscriber before exit is not allowed under NPS. However, in line with the PFRDA Act 2013, PFRDA is considering the option of interim withdrawal and, the same is yet to be finalized. For more detailed guidelines/circulars regarding withdrawal, you may visit PFRDA website (www.pfrda.org.in) as well as on CRA website (www.npscra.nsdl.co.in).