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What is NPS ?
NPS is a defined contribution pension scheme which is highly efficient, technology
driven system to save small amounts today, to build a fund for life’s second innings.
Who Can Join ?
You can join, if you are any or all of the following:
• Citizen of India; Resident or Non-Resident
• Age between 18-60 years, as on date of joining
• Salaried or Self Employed
• Complies with KYC norms
0 to 18 18 to 60 60 OnwardsAge
Group
NPS provides a platform for saving to create corpus, to enable subscriber for purchasing Annuity post retirement
Unmatched Lowest cost of Investment
Prudentially Regulated by PFRDA
Safe, Secure and Easily Portable
Attractive Market Linked Returns
Built on a highly efficient, technology driven platform
Investments managed by experienced
Pension Funds
Attractive Tax Benefits for
Employees and Employers
4
Subscribers
Central Recordkeeping Agency
Custodian
NPS Trust
Trustee Bank
Fund Flow
Annuity ServiceProviders
Funds Flow
Information Flow
Pension FundsNAV
PFRDA
POP
Online
POPSP
NPS Architecture
Tier-I account: Subscribers can contribute for retirement into this non-withdrawal account.
Income Tax benefits as per IT Act, 1961 for Tier I.
Tier-II account: Voluntary savings facility, where the subscriber can avail fund management
facility at very low costs. Subscribers are free to withdraw amount from this
account. However, tax benefits are not available.
Currently, CSC is accepting registrations for Tier I only. Tier II will be available in next phase.
Particulars Tier I Tier II
Minimum Contribution at the timeof account opening
Rs. 500/- Rs.1,000/-
Minimum amount percontribution
Rs.500/- Rs.250/-
Minimum contribution in afinancial year
Rs.1000/- Rs.2,000/-
Minimum frequency ofcontributions per financial year
1 1
Role of CSC under NPS
To offer advice on NPS to the prospects and to facilitate opening of NPS accounts
To disseminate information about NPS
To accept contributions from subscribers and timely remit the same
To accept service request from the subscriber and to act on them
To redress the grievances of the subscribers
To process exit and withdrawal request
• Citizen to visit any CSC & ask VLE to open a NPS account.
• VLE login into his Digi Seva Portal & Click on NPS, Enter his Aadhaar no. & authenticate him through Aadhaar/eKYC option.
• Enter the details like Nominee, Contribution amount, Choose Fund manager, upload his Signature and collect the contribution amount from the subscriber.
• Pay the amount using the wallet, submit application and generate PRAN.
• Take the print out of the form, get it signed by the subscriber & dispatch it to M/s Alankit Assignments Ltd, Alankit House, 4E/2, JhandewalanExtension, New Delhi 110005 with in 3 working days.
Choice of PFMs
1. ICICI Pension Fund Management Company Limited
2. Kotak Mahindra Pension Fund Limited
3. Reliance Capital Pension Fund Limited
4. SBI Pension Fund Private Limited
5. UTI Retirement Solutions Limited
6. LIC pension Fund Limited
7. HDFC Pension Fund Manager Company Limited
Investment Option
❖ Investment Option can be changed once in a financial year
Active Choice Subscriber decides allocation pattern amongst A, E, C & G
Auto Choice Funds managed on the pattern of a lifecycle fund
Asset Class Cap on Investment
Alternative (A) 5%
Equity (E) 50%
Corporate Bonds (C) 100%
Government Securities (G) 100%
Funds to be allocate in E, C & G as per the age of the Subscriber
To Employers
• Contributions made by the employer (upto 10% of Basic + DA) is allowed as a business
expense under Section 36 (1) iv (a) of Income Tax Act 1961.
To Employees
• Employees own contribution is eligible for tax deduction under sec 80 CCD (1) of Income
Tax Act up to 10% of salary (Basic + DA). This is within the overall ceiling of Rs. 1.50 Lacs
under Sec. 80 CCE of the Income Tax Act.
• Employee also gets tax deduction for the contribution made by the employer under section
80 CCD (2) of IT act upto 10% of salary (Basic + DA) which is in addition to the tax
benefits available under Sec. 80 CCE. No Monetary ceiling.
• Subscriber is allowed tax deduction in addition to the deduction allowed under
Sec. 80CCD(1) for additional contribution in his NPS account subject to
maximum of Rs. 50,000/- under sec. 80CCD 1(B). Exclusive to NPS
Interim Withdrawal
➢ Withdrawal will be allowed subject to
✓ Subscriber should be in NPS for 10 years
✓ Amount should not exceed 25% of the contributions made
by the subscriber
✓ Withdrawal can happen only against specified reasons
Withdrawal option are limited to ensure
sufficient terminal corpus
Normal RetirementConditions for
Withdrawal
Pre mature Retirement
Death of subscriber
Vesting CriteriaAt any point in time before
superannuation
Vesting CriteriaOn attaining the
superannuation
Vesting CriteriaDeath due to any cause
Vesting Criteria Benefit
At any point in time before
superannuation
(allowed to subscriber who
have been in NPS for at least
10 years)
Compulsory Annuitisation- minimum 80%
Lump sum withdrawal- maximum 20%
If Corpus< Rs. 1.00 Lac, complete withdrawal
On attaining the age of
superannuation as prescribed
in service rules) and upto 70
years of age
Annuitisation- minimum 40%
Lump sum withdrawal- maximum 60%
If Corpus< Rs. 2.00 Lac, complete withdrawal
- Subscriber can stay invested in the NPS upto the age of 70 years. Fresh
contributions are allowed during such a period of deferment.
- Can defer the withdrawal of eligible lump sum amount till the age of 70
years and withdraw the same in 10 annual instaments.
-Annuity purchase can also be deferred for maximum period of 3 years at the
time of exit.
Death due to any cause
In such an unfortunate event, option will be available to the nominee to
receive 100% of the NPS pension wealth in lump sum. However, if the
nominee wishes to continue with the NPS, he/she shall have to subscribe to
NPS individually after following due KYC procedure.
Exit Process
At the
age of 60
60% as
Lumpsum
Rs.50
lacs
RS. 30
lacs
At the
age of 50
80% for
Pension
20% as
Lumpsum
Rs. 25
lacs
Rs. 20
lacs
RS. 5
lacs
Monthly Pension of around Rs
11,883 *
Monthly Pension of around Rs Rs.
11,800 *
In Case of Death: Claimant will get full amount or as applicable for
exit before the age of 60
Lumpsum amount of
Rs. 30 lacs
Lumpsum amount of Rs. 5 lacs
Corpus
Corpus
RS. 20
lacs40% for
Pension
Variants of Annuity Plans
• Pension (Annuity) payable for life at a uniform rate to the annuitant only.
• Pension (Annuity) payable for 5, 10, 15 or 20 years certain and thereafter as long as you
are alive.
• Pension (Annuity) for life with return of purchase price on death of the annuitant
(Policyholder).
• Pension (Annuity) payable for life increasing at a simple rate of 3% p.a.
• Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse during
his/her lifetime on death of the annuitant.
• Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse
during his/her lifetime on death of the annuitant.
• 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, payment of annuity will
cease after the death of the annuitant and purchase price is paid to the nominee.
Annuity Service Providers
Intermediary Charge Head Service Charge Method of Deduction
POP
Initial Subscriber Registration Rs. 125
To be Collected Upfront
Initial Contribution0.25% Min: Rs. 20 &
Max : Rs.25,000All Subsequent Contribution
All Non-Financial Transaction Rs. 20
Earning : VLE will get 80% - TDS of above charges upfront
➢ Aadhaar Based Registration of Subscriber.
➢ Instant PRAN allotment
➢ No Paperwork for Subscribers.
➢ PRAN kit will be delivered to the subscriber within 30 days from NSDL.
➢ Direct contribution through Payment Gateway Service Provider (PGSP) by all
existing Subscribers. Online Credentials will be in the PRAN Kit.
➢ Subsequent contribution by furnishing only PRAN Number to the VLE.
