Individuals who are employed and contributing to NPS would enjoy tax benefits on their own contributions as well as their employer’s contribution as under:
(a) Employee’s own contribution under 80CCE- Eligible for tax deduction up to 10% of Salary (Basic + DA) under Section 80 CCE within the overall ceiling of Rs. 1.5 lakh.
(b) Employee’s own contribution under 80CCD: Eligible for tax deduction up to 50,000 under section 80CCD (1) over and above limit of Rs. 1.5 lakh provided under Sec 80 CCE.
(c) Employer’s contribution – The employee is eligible for tax deduction up to 10% of Salary (Basic + DA) contributed by employer under Sec 80 CCC(2) over and above the limit of Rs. 1.5 lakh provided under Sec 80 CCE (Maximum tax exemption applicable on investment upto Rs.7.5 lakh made by employer towards NPS (National Pension System), PF (Provident Fund) and (Superannuation)).
Early withdrawals in NPS are permitted for specific purposes like child’s marriage, higher education, treatment of critical illnesses etc. You can withdraw up to 25% of self-contributed amount towards NPS Account after 3 years of contribution. Additionally, you can withdraw from NPS Account twice. Every subsequent withdrawal will be 25% of the incremental self-contribution made after the last withdrawal.
SIP status view, list of SIPs and cancellation of existing SIPs can be done online via SIP link provided by your POP. Following steps may be followed to do any of the above transactions:
You can shift the NPS account to new employer with same PRAN account if the new employer is already a registered entity under NPS. But if not, then you can continue the PRAN account under All Citizen Model (personal NPS).
As per PMLA guidelines, self-contribution in NPS account should be made through your bank account itself. Therefore, SIP setup can only be done by the Individual who owns the NPS Account.
You may contribute through HDFC Bank website or you may also login to your CRA portal to make contributions. SIP option is also available.
Only an Individual can be a nominee. You will be allowed to register up to three nominees only. Decimals/ fractional values shall not be accepted in the nomination(s) percentage share value. Sum of percentage share of all the nominees must be equal to 100. If sum of percentage is not equal to 100, all nominations will be rejected. The registration of nominee details will not be done unless all details are duly filled up in the nomination form.
The following insurance companies providing annuity services have been empanelled by PFRDA as Annuity Service Providers (ASPs):
Currently, SIP deduction is available for 5th, 10th 21st of every month. If you set up SIP in the current month then deduction commences from the next month. For Example, if you set up SIP on 3rd of the month and select any of the dates available for deduction (5th/10th/21st of the month), SIP will start from next month.
Yes. An annual statement containing details of the unit holdings is issued by Central Recordkeeping Agency (CRA) to your registered address 3 months after the end of every financial year.
Credit of units to PRAN takes place as part of regular settlement process for your SIP contribution as well. If your accredited bank registered for SIP, has remitted the amount debited from your account towards SIP contribution to Payment Gateway Service Provider (PGSP), then credit of units will take T+1 days (i.e. two working days) where T is day of receipt of clear funds by PoP (Service Provider for SIP) from PGSP.
You can exit from NPS after 5 years or attainment of superannuation age (retirement age) defined by the corporate whichever is earlier. In case of exit before 60 years, 20% of the corpus can be withdrawn and the balance 80% goes to annuity.
Yes. In case of loss or damage of PRAN card, you need to submit a duly filled S2 form to the POP for issuance of duplicate PRAN card. Rs. 40 plus applicable GST will be deducted by CRA for issuing duplicate PRAN.
You will receive an e-mail alert from CRA team.
Yes. You need to submit the request form along with the service charge of Rs. 30 plus GST to the POP for initiating the modification.
You may also login to your NPS account and make changes to Contact details, Nomination, Investment option, Pension Fund Manager (PFM), etc
An annuity is a financial instrument which offers monthly/ quarterly/ annual pension at a guaranteed rate for the period you choose. Currently, only the registered life insurers offer annuities in Indian market. This needs to be upfront. Please create a glossary of terms.
Any Individuals having an active NPS account with a mobile and email ID registered under the same can setup Systematic Investment Plan (SIP) through their Point of Presence.
In addition, for setting up SIP, you must have an active Internet Banking enabled bank account with a mobile number and Email id registered with it to enable e-mandate for SIP deduction.
Yes, Nomination can be made by the employee.
Yes, you have an option to setup SIP from different bank account, than the registered one in NPS.
Primary objective of NPS is to create a corpus which can be used at the time of retirement to buy pension for you/ your nominee. Hence, there is a restriction imposed on lump sum amount accessible on exit.
There are two charges associated with setting up an SIP under NPS:
Contribution charges under NPS are defined by the Regulator i.e. Pension Fund Regulatory & Development Authority (PFRDA). Thus, all recurring SIP transactions are treated as contribution transactions and charges as prescribed by PFRDA are levied by your Point of Presence (POP) for the services rendered to you. Illustration of the charge mechanism is below for your perusal:
E.g., If intended recurring SIP amount is: Rs. 1,000
+
Contribution charge as per guidelines levied by PoP: Can be anywhere between 0.30% to 0.50% of contribution amount (subject to a min of Rs. 30 and max. Rs. 25,000) will be Rs. 30/- for the transaction
+
GST: @ 18% of Rs. 30/- (i.e. PoP charge for processing contribution)
The final SIP amount deducted: Rs. 1035.40
No, as per existing guidelines there is no such provision under NPS.
You will receive an intimation about your SIP transactions on your registered Mobile No. or Email ID or Both, as per your selection during the process of setting up the SIP.
SIP should be set up as per your retirement goals. SIP can be setup for minimum of Rs. 500 and maximum of Rs. 1, 00,000 (the amount mentioned is applicable for each recurring SIP transaction and not the overall amount contributed during the FY). However, you may set up additional SIPs if you wish to contribute more towards your NPS account.
You can unfreeze the NPS Account by paying the minimum contribution.
You need to contribute minimum amount of Rs. 1,000 per annum to keep your NPS account active.
Yes, you have an option to select Pension Fund (PF) and Investment Option while applying for NPS account.
Yes, Government has allowed investors covered by EPF and other superannuation funds to shift to the NPS.
You do not need to worry, as the amount shown is the maximum amount for which NACH mandate is presented to your bank. As NPS is a long term investment vehicle, this is done to ensure uninterrupted contributions and avoid any inconvenience to you in future arising out of change in regulatory guidelines regarding charges. Rest assured, only the amount intended/mandated to be contributed through SIP will be debited from your account. You will also receive intimation about the same on the mode of communication (email ID/mobile number/both) post authorisation by you on your bank’s Internet Banking page.
There are 4 types of individual funds in which your money can be invested:
Based on these, there are 2 investment options available under NPS corporate:
Active choice - In active choice, you have to select a Pension Fund Manager and mention the ratio of funds to be invested among E, C, G and A. You can specify the percentage in which your money is to be invested in these asset classes. However, allocation in equity cannot be more than 75% and Alternate Assets cannot be more than 5%.
Auto choice - There is a lifecycle fund and you need to select a pension fund. Your funds will be invested as per the life cycle fund matrix based on your age.
You will have flexibility to choose one out of ten Pension Fund Managers (PFMs) and the percentage in which the selected PFM will invest the funds.
Yes, SIP option can be availed for both Tier- I as well as Tier- II A/c simultaneously as well as independently.
It is not advisable to miss SIP for any month and you should maintain sufficient balance in your bank account through which you have set up the SIP. However, if by chance the payment is missed, you may still make self-contribution in your NPS account of the same amount. The investment for missed SIP transaction will not happen in your NPS A/C, however, SIP deduction will continue from the next month of the SIP cycle.
Setting up SIP in NPS has never been so easy. The process is entirely online and should not take you more than a few minutes. You may complete entire process in 7 easy steps. Please refer below for the same:
It is advised to continue SIP in disciplined manner as per the mandate provided. However, if you wish to stop SIP due to any reason, it can be done after 03 months of its activation
Yes, once the contribution is credited to your NPS Account, an e-mail alert as well as an SMS is sent to your registered e-mail ID and mobile number.
For setting up SIP, you must have an active Internet Banking enabled bank account with a mobile number and Email id registered with it to enable e-mandate for SIP deduction.
Yes, you may continue to have SIP and still continue to make lump sum contributions towards your NPS Account as and when you wish.
Annuity Service Providers (ASPs) provide the following type of annuities to the subscribers of NPS, subject to the conditions like stipulated minimum corpus, age at entry etc.:
1. Pension (Annuity) payable for life at a uniform rate to the annuitant only.
2. Pension (Annuity) payable for 5, 10, 15 or 20 years certain and thereafter as long as you are alive.
3. Pension (Annuity) for life with return of purchase price on death of the annuitant (Policyholder).
4. Pension (Annuity) payable for life increasing at a simple rate of 3% p.a.
5. Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse during his/ her lifetime on death of the annuitant.
6. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/ her lifetime on death of the annuitant.
7. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse during his/ her lifetime on death of the annuitant and with return of purchase price on death of the spouse. If the spouse predeceases the annuitant, the payment of annuity will cease after the death of the annuitant and purchase price is paid to the nominee.
Your account will be frozen.
You can view/ print the SOTs by logging into CRA website.
All major Scheduled Indian Banks are available for making SIP payment. Currently, you may setup SIP through 43 banks. The list is continuously expanding with more and more Banks coming forward for participation on the NPCI platform facilitating this service (eNACH).
There are many benefits of setting up a SIP in NPS. Some of them are illustrated below-
No, HDFC Bank has a complete digital process for its customers. You will have to upload you latest photograph and signature sample online.
Yes, minor can be a nominee. In such case, you will be required to provide guardian's details and date of birth of the minor. Partial withdrawal from NPS Account/ Early Termination
No, multiple NPS accounts for a single individual are not allowed and there is no necessity also as the NPS is fully portable across sectors and locations. If you want to link your NPS account to corporate, to avail the benefits under the Corporate NPS model, you should shift existing NPS account to corporate model.
**Persistency fee is payable to such POPs to which the subscriber is associated for more than 6 months in a financial year
*GST and other levies, as applicable, will be levied as per the existing tax law
*KYC verification charges of eNPS application Rs 125 + taxes
*Processing of Exit / Withdrawal @0.125% of Corpus with Minimum ₹125/- and Max ₹500/-
*Other taxes / regulatory levies applicable from time to time
SIP is treated as a self-contribution and hence eligible for tax benefits under NPS. Investments under NPS made through SIP are eligible for the following tax benefits:
CRA app gives you details of your account online. You can access latest account details as is available on the CRA website (https://cra-nsdl.com/CRA/ or cra.Kfintech.com) with your User ID (PRAN) and Password. The app accesses your account details online and provides you with user friendly interface to browse through your account information. It also enables you to maintain your latest contact details and password.
In case of exit from NPS on retirement age defined by the corporate, you can defer the withdrawal option till 10 years depending on the market condition. You can withdraw this amount either in lump sum or take the same in 10 instalments before attaining the age of 75 years.
SIP mandate once set cannot be modified currently under NPS. However, you may cancel the existing SIP after 03 months of its activation and restart a new SIP with a modified amount.
Exit at the age of 60
Yes, you may setup up multiple SIPs at the same time for the same NPS account.