NATIONAL PENSION SYSTEM

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 18-60 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 25% of the employee contributions, after a lock in period
Part Withdrawals under
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 60 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a. 60% of the corpus can be commuted/withdrawn in lump sum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 60 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a. 20% of the corpus can be withdrawn in lump sum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 Worlds 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.