- Overview
Introduced by the Government of India, National Pension Scheme (NPS) is the solution to a secured life, post-retirement. This scheme functions as an investment and pension plan by providing income along with market-based returns which proves to be helpful, especially during old age. This national pension scheme was implemented on May 1, 2009, and individual subscribers are allotted with an exclusive Permanent Retirement Account Number (PRAN). At Bajaj Finserv MARKETS, we understand that securing your future is important and hence bring to you an NPS scheme that promises 100% transparency and a host of tax benefits that can be availed.
Why choose Finserv MARKETS?
Features and Benefits
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Tax Benefits
NPS tax benefits under section 80CCD (1B) of the Income Tax Act offers subscribers an additional deduction of Rs. 50,000/-.
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Flexibility of Choice
Enjoy a host of investment options and fund managers, allowing subscribers the flexibility of choosing both. Subscribers can also switch between investment plans and fund managers.
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Portability & Online Tracking Facility
An NPS account can be operated from anywhere. With online accessibility, subscribers can change jobs and even move from one city to another and yet manage/track their NPS.
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Regulated Investments
NPS Contribution is regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
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Flexibility of Investment Distribution
You can choose Auto or Active choice options for investment distribution. If ‘Active’ choice is selected, the percentage distribution among government securities, corporate bonds and equities must be mentioned.
How To Apply?
NPS Eligibility Criteria
- You must be a resident Indian citizen
- You must be between the ages of 18 to 65 years
National Pension Scheme: An overview
National Pension Scheme (NPS) is a social security pension and investment scheme initiated by the Central Government. As a pension program, it is open to employees in the public, private and even the unorganized sector, in order to provide old age security to them. The scheme aims to create a long-term saving avenue by encouraging people to invest in a pension account regularly during the course of their employment. After retirement, the subscriber to the scheme receives a certain percentage of the corpus and the remaining account is diverted to an annuity scheme, which brings in a monthly pension for the post-retirement years. The Scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA). Each subscriber who joins the NPS is allotted a unique Permanent Retirement Account Number (PRAN) number. The PRAN remains the same throughout life.
Who can open an NPS Account?
The eligibility requirements for an NPS account with Finserv MARKETS are simple:
You need to be a citizen of India (both resident and Non-resident are eligible) in the age group of 18-65 years (as on the date of submission of NPS application).
Additionally. You need to be KYC compliant and not have a pre-existing NPS account. Opening multiple accounts for an individual is not allowed under NPS.
Types of NPS Accounts
As a subscriber to the scheme, you have the option to open two types of NPS Accounts under the same Permanent Retirement Account Number (PRAN): Tier I and Tier II. Here’s a detailed look at them:
Tier I:
Minimum amount per contribution - Rs. 500
Minimum contribution per Financial Year - Rs. 1,000
Minimum number of contributions in a Financial Year – 1
You can decide on the frequency of your contributions throughout the year as per your convenience, but the minimum limits should be complied with.
Withdrawals are restricted and subject to terms and conditions.
Tier II:
Minimum amount per contribution - Rs. 250
No minimum balance required
Under Tier II, you are free to withdraw the entire accrued corpus at any point in time.
Investment Choices under NPS
Investors are also given the option to select the pattern of allocation for their investments.
Active Choice: This option gives you the freedom to design the portfolio among 3 asset classes:
- You can choose to invest up to 50% in equity, which is a high risk – high return option
- Under Corporate Bonds, funds are invested in fixed income bearing instruments which offer medium returns.
- Government Securities, which provide assured returns.
Auto Choice- Life Cycle Fund: With this option, the funds are invested in a pre-defined proportion depending on your age. The exposure to risk is higher at a younger age, so the investments are inclined towards equity. The exposure to risk progresses towards safe instruments with assured returns as the subscriber ages.
Tax benefits
There is a deduction of up to Rs. 1.5 lakhs to be claimed when you avail NPS with Finserv MARKETS – for your contribution as well as for the contribution of the employer. Under Section 80CCD(1), a deduction is allowed on the self-contribution, up to a maximum deduction of 10% of the salary, but no more than the said limit of Rs 1.4 lakhs. If you are self-employed, this limit is 20% of the gross income.
This is because, for the salaried person, the employer’s contribution is also deductible to the extent of the lower of the two:
- Actual NPS contribution by the employer
- 10% of Basic + DA
On top of this, an additional deduction for investment up to Rs. 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh. In totality, therefore, you can claim a tax deduction of up to Rs 2 lakhs.
With online accessibility, you can access your NPS account anywhere. Even if you change jobs and/or move from one city to another, you can still manage/track their NPS.
- What is NPS
- Benefits of NPS
- National Pension System (NPS) v/s Public Provident Fund (PPF)
- What are the tax benefits of NPS?
- How to link Aadhaar card with NPS account?
- How much should I invest in NPS for tax benefit?
- How is NPS pension calculated?
- What is the rule of NPS?
- Who is eligible for National Pension Scheme?
- Is it beneficial to invest in NPS?
- Tax Benefits of NPS
- National Pension Scheme: Features & Benefits
- How to open an NPS account
- Types of NPS Account
- Can We Withdraw Money from NPS Account?
- Invest with Finserv MARKETS App
Why National Pension Scheme from Finserv MARKETS?
Functioning both as an investment and a pension plan, National Pension Scheme (NPS) was introduced by the Government of India to enable people to secure life post-retirement. As a customer, you can subscribe to this scheme online at Finserv MARKETS and enjoy a host of benefits that include tax savings up to Rs. 50,000 under section 80CCD (1B) and the flexibility to switch between investment plans and fund managers. With online accessibility and portability, you can manage/track your NPS account anywhere in India.
Manage all your queries here
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✔️What is NPS?
National Pension Scheme or NPS refers to a scheme that functions as an investment as well as a pension plan. Initiated by the Government of India, this scheme caters to the citizens of the country with the objective of providing security and pension during old age. This scheme is regulated and managed by the Pension Fund Regulatory and Development Authority (PFRDA) and was implemented on May 1, 2009. Do read the overview section on our Finserv MARKETS National Pension Scheme product page for more information. -
✔️Can anyone subscribe to an NPS available on Finserv MARKETS?
As a citizen of India, irrespective of whether you reside in the country or are an NRI, you can subscribe to an NPS. However, there are certain conditions - 1. As a subscriber, you must fall into the age bracket of 18 – 65 as on the date you submit the application for NPS subscription 2. You must comply with the KYC regulations specified in the NPS Subscriber Registration Form. -
✔️How does the NPS Scheme work?
Upon joining, subscribers are allotted a Permanent Retirement Account Number (PRAN). All contributions from the subscriber towards this NPS scheme is made directly through the employer that he/she works for. At retirement or during exit of the scheme, this corpus of funds is made available to the subscriber. However, the subscriber must re-direct some amount from this corpus to be invested into Annuity. This serve as a monthly pension which is provided to the subscriber, post retirement. -
✔️Please list the types of NPS Accounts made available to a subscriber.
Tier I - 1. This type of NPS account is also referred to as Pension account and all investments related to tax savings happens through this account 2. Withdrawal is restricted here 3. The minimum annual contribution towards this NPS account is Rs. 1,000. It is mandatory for a subscriber to open a Tier I NPS account. Tier II 1. This type of NPS a count is also known as Investment account 2. The subscriber can withdraw from this NPS account as and when he/she needs -
✔️Please state the entry and exit age for NPS.
The minimum entry age is 18 years while the maximum is 65 years. As for exit age, the minimum age is 10 years after opening an NPS account while the maximum is 70 years. -
✔️Can I open more than one account under the NPS scheme?
No. A subscriber is only allowed one NPS account. -
✔️Are there any NPS fee’s and charges that I must pay when opening an account through Finserv MARKETS?
Apart from the amount that you decide to invest, there are minimum charges to be paid when opening an account under National Pension Scheme. These include transaction charges, advisory charges and applicable GST. Do keep in mind that these charges are calculated basis the amount you invest.
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