About NPS

✔ Dedicated Retirement Corpus- You can regularly invest your money into your NPS (pension scheme) account and have a dedicated corpus for your retirement.

✔ Affordable and cost effective- You can start investing in NPS as low as Rs. 500 per transaction and Rs. 1000 per year. Compared to other asset classes of NPS if invested in equity, market linked returns in the long run can be fairly attractive.

✔ Investment Flexibility- You can switch between various asset classes like equity, corporate debt, government bonds and alternate funds (twice a year) and there is no upper cap on investments in NPS.

✔ Easy Liquidity- You are allowed to withdraw up to 25% of your corpus from NPS account basis certain conditions before the age of maturity. Also, on maturity, you can withdraw 60%as a lump sum tax- free, while 40% of the accumulated corpus ensures a monthly income in the form of pension.

✔ Portability and Transparency- You would be identified with a unique Permanent Retirement Account Number (PRAN), which can be operated from anytime, anywhere. Also you can check value of investment anytime.

✔ Prudently Regulated- Transparent investment norms, regularly monitored and performance reviewed by NPS Trust and Regulators (PFRDA).

• Benefit over and above 80C- Benefit Up to Rs.50, 000 deductible under section 80CCD (1B)over and above the limit of 80CCE.
  
  
• Benefit within 80C- Eligible for 10% of Basic salary under section 80 CCD (1A) within Rs.150, 000 limit under section 80 CCE.
  
  
• Employer contribution- Opportunity to get up to 10% of basic as tax-free salary u/s 80 CCD (2) without any upper cap in terms of absolute value. This benefit is over and above the limit of 80CCE and 80CCD (1B)
  
  
• Tax free Maturity- On maturity, the subscriber is allowed to withdraw 60% or the corpus as lump sum. Such withdrawal will be tax free Income Tax Act 1961 - Section 10 (12A). And rest 40% must be annuitized.

• Individual NPS :-  NPS was  introduced for the benefit of citizens for wealth creation and tax benefit. Click here to know more.

• Corporate NPS :- Corporate NPS is a contribution scheme through which both the employer and employee can build employees’ pension wealth. Corporate NPS model is available for Public and Private sector. Click here to know more.

Under the NPS, Savings are pooled in to a pension fund which are invested by PFRDA regulated professional fund managers as per the approved investment guidelines in to the diversified portfolios comprising of government bonds, bills, corporate debentures and shares. These contributions would grow and accumulate over the years, depending on the returns earned on the investment made.

Subscriber can invest any of the four Asset Classes -

✔ Equity (Contribution is allowed to the extent of 75% only)

✔ Corporate Bond (Contribution is allowed to the extent of 100%)

✔ Government Bond (Contribution is allowed to the extent of 100%)

✔ Alternative Infrastructure (Contribution is allowed to the extent of 5% only)

However, the total allocation across the specified asset classes must be equal to 100%

The NPS offers Subscriber two approaches to invest their money:

• Active Choice: Subscriber, as the case may be, will have the option to actively decide as to how the NPS pension wealth is to be 
  invested across Asset class E (up to 75%), Asset Class C (100%), and Asset Class G (100%).                                   
• Auto Choice: In this option, the investments will be made in a life-cycle fund. Here, the proportion of funds invested across three asset classes will be determined by a pre-defined portfolio (which would change as per age of subscriber). 

There are three different options available within ‘Auto Choice’ –

• AGGRESSIVE - LC 75- Equity exposure up to 75%
• MODERATE - LC 50- Equity exposure up to 50%
• CONSERVATIVE - LC 25- Equity exposure up to 25%

Click here to check the updated returns on investments.