The NPS is a new contributory pension system launched by Government of India with
effect from 1st January 2004. NPS regulated by Pension Fund Regulatory and Development
Authority (PFRDA), was first introduced for government employees and then in 2009
end for all citizens of India. Under the NPS, you can regularly invest your money
into your pension account and have an option of taking a part of the corpus as lump
sum amount and the balance in form of fixed monthly income. Use this NPS calculator
to understand all the benefits of NPS at a glance.
A citizen of India, whether resident or non-resident, subject to the following conditions:
You should be between 18-60 years of age as on the date of submission of this application
to the POP / POP-SP.
You should comply with the Know Your Customer (KYC) norms as detailed in the Subscriber
Registration Form. The Subscriber Registration Form attached with this offer document
should be duly filled-in by the applicant and all terms and conditions mentioned
therein should be duly complied with. All the documents required for KYC compliance
need to be mandatorily submitted.
The following applicants cannot join:
- 1. Undercharged insolvent: Individuals who are not granted an 'order of discharge'
by a court
- 2. Individuals of unsound mind: An individual is said to be of unsound mind for
the purposes of making a contract if, at the time when he makes it, he is incapable
of understanding it and of forming a rational judgment regarding its effect upon
- 3. Pre-existing account holders under NPS
Yes. Investment in NPS is independent of your contribution to any Provident
- It is voluntary - NPS is open to every Indian citizen. You can
choose the amount you want to set aside and save every year. Extending old age security
coverage & income to all citizens
- It is flexible - You can choose your own investment option and
Pension Fund Manager and see your money grow
- It is portable - You can operate your account from anywhere in
the country, even if you change your city, job or your Pension Fund Manager
- It is regulated - NPS is regulated by PFRDA, with transparent investment
norms and regular monitoring and performance review of Fund Managers by NPS Trust
- Reasonable market based returns - over the long term
- Tax benefits - Contribution towards NPS exempted under Section
- Low cost investment - Cost effective mode of planning for one's
Employer contributing to the NPS on behalf of an employee will get deduction from
(i.e. employer's income) an amount equivalent to the amount contributed or 10% of
basic salary plus DA of the employee, whichever is less (Section 36 (1)(iv a) of
the Income Tax Act 1961)
(In simple terms - Corporate can help their employees to lessen tax burden by saving
in NPS up to 10% of their basics salary. This investment is another avenue over
& above those of Section 80C investments to secure their retirement well in advance).
Additional contribution by individual employee is eligible for deduction from Income
under Section 80CCD of the Income Tax Act 1961. However, investments under Section
80C plus the premium on pension products on Section 80CCC should not exceed Rs.
1Lac per assessment year to claim for the deduction.
Yes. You can make contribution in your NPS account anytime between the 18 to 60
years of age. After attaining 60 years of age, you will not be permitted to make
further contributions to the NPS account.
Any Individual who wants to get registered as a subscriber and wants to open a Permanent
Retirement Account (PRA) (Tier-I) in NPS would submit the duly filled form (Composite
application form for subscriber registration) with other supporting KYC documents
to a POP.
Application form for registration for NPS can be downloaded from the POP's website.
You need to forward the duly filled Subscriber Registration Form, photograph, 1st
contribution cheque & self-attested KYC documents to POP.
You are required to make your first contribution at the time of applying for registration
with the POP-SP. You are required to make contributions subject to the following
Minimum amount per contribution - Rs. 500,
Minimum contribution per year - Rs. . 6,000,
Minimum number of contributions - 01 per year
Over and above the mandated limit of a minimum of 1 contribution, you may
decide on the frequency of the contributions across the year as per your convenience.
PFRDA will impose penalties on intermediaries in case of delay beyond this period.
No, there is no upper limit on investment in NPS.
Subscriber needs to pay the service charges to POP for subscribing to NPS system.
- An Initial subscriber registration charge of Rs. 100 and an ad valorem transaction
charge of 0.25% of the initial contribution amount from subscriber subject to a
minimum of Rs. 20 and a maximum of Rs. 25,000.
- Any subsequent transaction involving contribution - 0.25% of the amount subscribed
by the NPS subscriber, subject to minimum of Rs. 20 and a maximum of Rs. 25,000.
- Any other transaction not involving a contribution from subscriber - Rs. 20.
- Change in subscriber details.
- Change of investment system / Fund Manager.
- Processing of withdrawal request.
- Processing of request for subscriber shifting.
- Issuance of printed account statement.
- Any other subscriber services as may be prescribed by PFRDA.
After the registration forms are submitted to a POP, the same is forwarded to CRA
- Facilitation Centers (CRA-FC). PRAN is generated and the PRAN Card is printed
and dispatched within 20 days from the date of receipt of duly filled registration
form at the CRA - Facilitation Centre.
The 1st contribution cheque would be debited post PRAN generation.
Once the PRAN is generated, an email alert as well as a SMS alert will be sent to
the registered email ID and mobile number of the subscriber. For security reason,
only the last four digits are mentioned in the alert. Subscribers can know the PRAN
on receipt of the PRAN Kit or they can also approach POP for the PRAN.
On successful registration, a PRAN (Permanent Retirement Account Number) will be
allotted to the subscriber. A PRAN Kit containing PRAN Card, subscriber details
(referred as Subscriber Master List) and an information booklet is sent to the subscriber's
registered address. The T-PIN and I-PIN are sent separately to the registered address.
The PRAN Card is a document with PRAN, subscriber's name, father's name, photograph
and signature / thumb impression. This card proves the completeness of information
in the CRA system. A copy of the card is required for Tier-II activation and also
for subsequent contribution in Tier-II account. The Subscriber Master List shows
all the information as provided by the subscriber in his/her application and accordingly
captured in CRA system. A subscriber may verify the correctness of the information
submitted for registration by looking at the Subscriber Master List.
PRAN Card is dispatched to the registered address within 20 days from the day of
receipt of duly filled registration form at the NSDL CRA office.
POP-SP will perform verification checks, such as whether name is mentioned, photograph
is attached, signature is present, other mandatory fields (other supporting documents
for KYC norms prescribed by PFRDA) are properly filled, system preference details
are mentioned as required, first time contribution amount etc. before accepting
the form. In case the application form is not filled with all the required details,
CRA-FC will not accept the registration form. CRA-FC will intimate subscriber's
POP-SP regarding rejection of forms.
In case of exit before 60 years, a subscriber is required to invest at least 80%
of the pension wealth to purchase a life annuity from an Annuity Service Provider
(an IRDA regulated Life Insurance Company appointed by PFRDA). Remaining 20% of
the pension wealth may be withdrawn as a lump sum.
The NPS offers you two approaches to invest your money:
Active choice - Individual Funds (Asset Class E, Asset Class C, and Asset Class
Auto Choice - Life cycle Fund
You will have the option to actively decide as to how your NPS pension wealth is
to be invested in the following three options:
Asset Class E - Investments in predominantly equity market instruments.
Asset Class C - Investments in fixed income instruments other than Government securities.
Asset Class G - Investments in Government securities.
You can choose to invest your entire pension wealth in C or G Asset Classes
and up to a maximum of 50% in equity (Asset Class E). You can also distribute your
pension wealth across E, C and G Asset Classes, subject to such conditions as may
be prescribed by PFRDA.In case you decide to actively exercise your choice about
investment options, you shall be required to indicate your choice of Pension Fund
Manager (PFM) from among the seven Pension Fund Managers (PFMs) appointed by PFRDA.
In case you do not indicate any choice of PFMs, your form shall not be accepted
by the POP-SP.
While exercising an Active Choice, remember that your investment allocation is one
of the most important factors affecting the growth of your pension wealth. If you
prefer this "hands-on" approach, keep the following points in mind:
Consider both risk and return. The E Asset Class has higher potential returns than
the G Asset Class, but it also carries the risk of investment losses. Investing
entirely in the G Asset Class may not give you high returns but is a safer option.
You can reduce your overall risk by diversifying your investment. The three individual
asset classes offer a broad range of investment options; it is good not to put "all
your eggs in one basket." The amount of risk you can sustain depends upon your investment
time horizon. The more time you have before you need to withdraw from your account,
the more is the risk you can take (This is because early losses can be offset by
Periodically review your investment choices. Check the distribution of your account
balance among the funds to make sure that the mix you chose is still appropriate
for your situation. If not, rebalance your account to get the allocation you want.
NPS offers an easy option for those participants who do not have the required knowledge
to manage their NPS investments. In case you are unable / unwilling to exercise
any choice as regards asset allocation, your funds will be invested in accordance
with the Auto Choice option. You will, however, be required to indicate your choice
of PFM. In case you do not do so, your form shall not be accepted by the POP-SP.
In this option, the investments will be made in a life cycle fund. Here, a pre-defined
portfolio will determine the fraction of funds invested across three asset classes.
At the lowest age of entry (18 years), the Auto Choice will entail investment of
50% of pension wealth in "E" Class, 30% in "C" Class and 20% in "G" Class. These
ratios of investment will remain fixed for all contributions until the participant
reaches the age of 36. From age 36 onwards, the weight in "E" and "C" Asset Class
will decrease annually and the weight in "G" Class will increase annually till it
reaches 10% in "E", 10% in "C" and 80% in "G" Class at age. Like the Active Choice,
you must choose one PFM under the Auto Choice.
* In case of Auto Choice, reallocation among the asset classes shall take place
on the date of birth of the subscriber. Net Asset Value (NAV) will be released on
a regular basis so that you may be able to take informed decisions.
No. You have to select either Active Choice or Auto Choice as your option when making
investments under NPS.
You are required to specify your Pension Fund Manager (PFM) at the time of applying
for NPS registration. You will be required to indicate your preferred PFM out of
the 7 PFM identified by PFRDA.
NPS allows you to choose from any one of the following seven entities to manage
your Pension Fund currently: -
- HDFC Pension Management Company Ltd.
- LIC Pension Fund Ltd.
- ICICI Prudential Pension Funds Management Company Ltd.
- Kotak Mahindra Pension Fund Ltd.
- Reliance Capital Pension Fund Ltd.
- SBI Pension Funds Private Ltd.
- UTI Retirement Solutions Ltd.