NPS Online

The National Pension Scheme (NPS) is a voluntary, long-term retirement savings scheme introduced by the Government of India in 2004. It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

The NPS is open to all Indian citizens, including employees from the public, private, and unorganized sectors, as well as self-employed individuals. It aims to provide individuals with a regular income after their retirement.

Key features of the National Pension Scheme include:

1. Contribution: Individuals can contribute to their NPS account during their working years. Both employers and employees can contribute to the scheme. The minimum contribution amount and frequency depend on the type of account and the subscriber's choice.

2. Investment Options: The NPS offers two types of investment options: Active Choice and Auto Choice. Under Active Choice, subscribers can decide how their contributions are allocated among different asset classes, including equities, corporate bonds, and government securities. Auto Choice involves an age-based asset allocation strategy managed by the NPS.

3. Permanent Retirement Account Number (PRAN): Each subscriber is issued a unique PRAN, which acts as an account number for the NPS. It remains the same throughout the subscriber's life and can be used across India.

4. Portability: NPS accounts are portable, meaning subscribers can maintain the same PRAN even if they change jobs or locations.

5. Tax Benefits: The NPS offers tax benefits to subscribers. Contributions made by both the employee and the employer are eligible for tax deductions under Section 80C of the Income Tax Act, subject to certain limits. Additionally, there is a tax exemption on the lump sum withdrawal at the time of retirement.

6. Withdrawal: At the age of 60, subscribers can withdraw a portion of their accumulated corpus as a lump sum, while the remaining amount must be used to purchase an annuity from an Insurance Regulatory and Development Authority (IRDA) registered life insurance company. Subscribers can also opt for a deferred withdrawal option if they wish to continue their NPS account beyond the age of 60.