National Pension System - NPS

Features Of NPS

A tax is a mandatory fee or financial charge levied by any government on an individual or an organization to collect revenue for public works providing the best facilities and infrastructure. The collected fund is then used to fund different public expenditure programs. If one fails to pay the taxes or refuse to contribute towards it will invite serious implications under the pre-defined law.

Government of India initiative, regulated by PFRDA
Open for all Indian citizens between 18-70 years
Unique and portable PRAN (Permanent Retirement Account Number)
Choice of PFM, investment option and asset class
Lumpsum withdrawal & purchase of annuity

NPS Prosperity Planner

Tax Benefits Under Nps

Deduction of upto10% of salary (Basic + DA) from taxable income u/s 80 CCD(2). This is over and above The limits u/s 80 CCE.

(Employer Contribution can be deducted as ‘Business Expense’ from their Profit & Loss Account)

Employer

Deduction of upto 10% salary (basic+DA) within theoverall ceiling of Rs. 1.50 Lakh u/s 80 CCE.

Employee Contribution

Deduction of up to Rs.50,000u/s 80 CCD (1B) from taxable income for additional contribution to NPS.

Voluntary Contribution

Type Of Account

Particular	Tier I	Tier II
Option of selection of the Account	Mandatory	Optional
Withdrawal Facility Available	Conditional And Restricted Withdrawal	1 Withdrawal Anytime
Minimum Contribution at the time of A/c opening	Rs. 500	Rs. 1000
Minimum amount of subsequent Contribution	Rs. 500	Rs. 250
Minimum Contribution Required per year	Rs. 1000	–
Minimum No. of Contribution per year	One	–
Frequency of Contribution Permitted	Unlimited	Unlimited
Benefits of the account	Pension Account	Investment Account
Tax Exemptions	Tax exemption Available	Tax exemption not Available

Investment Options

Active choice

Active choice by subscriber from E,C, G & A

4 Fund Options Under NPS Active choice

Customer gets the following flexibilities:

Customer can realign portfolio in Active Choice Four Times in Year in a financial year
There are 4 funds / asset classes – Equities (E), Corporate Bonds (C), Government Securities (G) & Alternative Investment Schemes (A)one.

Auto choice

Auto Choice Investment across 3 funds is done in a life cycle as per age of the subscriber. Customer can switch between Active and Auto Choice twice in a financial year

3 Fund Options Under NPS Auto choice

It further offers choice between 3 life cycle funds:

Life Cycle Funds LC – 75 Aggressive
Life Cycle Funds LC – 50 Moderate
Life Cycle Funds LC – 25 Conservative

Choice Of Pension Fund Manager (PFM)

LIC Pension Fund Ltd

HDFC Pension Mangement Comapany Ltd

UTI Retirement Solution Ltd

Kotak Mahindra Pension Fund Ltd

SBI Pension Funds Private Ltd

ICICI Prudential Pension Funds Management Comapany Ltd

Aditya Birla Sun Life Pension Management Ltd

Tata Pension Management Ltd

Max Life Pension Funds Management Ltd

Axis Pension Fund Management Ltd

Partial Withdrawl

Allowed after 3 years of account opening

Up to 25% of Subscriber’s own Contribution can be withdrwan
For specific puposes like Higher Education, Child’s Marriage, Buying Home or Treatment of Critical illnesses etc.
Another 2 withdrawls allowed any time after the first withdrawlbution for availing of tax benfits u/s 80CCD (2) is treated as Employer Contribution and withdrawal is not.

Contribution for availing of tax benfits u/s 80CCD (2) is treated as Employer’s Contribution and withdrawal is not be permitted it.

Higher Education

Medical Insurance

Family Security

Marriage

Tax Treatment On Exit From Nps

Partial Withdrawal

Corpus Withdrawn is tax exempt

Annity Service Providers

ASP Schemes

Life Time Income

Life Time Income with capital refund

Life and Last survivor with 100% income

Life and Last survivor with 100% income with capital refund

NPS: Family Income (Annuity to subscriber and after he/she  expires, annuity to spouse)

CHARGES

Intermediary	Charge Head	Service Charges	How Debited
KFintech CRA	PRA Opening charges	Rs 39.36	To be collected upfront
	Annual PRA Maintenance cost per account	Rs 57.63	Cancellation of Units
	Charge per transaction	Rs 3.36	Cancellation of Units
POP	Initial subscriber registration	Rs 400	To be collected upfront
	Initial Contribution/Subsequent Contribution	0.50% of contribution (Min. Rs 20 Max. Rs 25000)	To be collected upfront
	All Non-Financial Transactions	Rs 20	To be collected upfront
Custodian	Asset Servicing charges	0.0032% p.a	Through NAV deduction
PF Charges	Investment Management Fee	0.01% p.a	Through NAV deduction
NPST	Reimbursement of Expenses	0.005% p.a	Through NAV deduction

Subscriber can exit from the scheme after 10 years of account opening or attainment of retirement age whichever comes first

Subscribers Joining Between 18-60 Years:

Subscribers Joining Between 18-60 Years	Exit on Maturity	Upon Death (Irrespective Of Cause)
Up to 20% of Corpus can be withdrawn in lump sum	Up to 60% of Corpus can be withdrawn in lump sum	Accumulated pension wealth (100%) would be paid to the nominee / legal heir of the subscriber
Balance amount to be invested in Annuity	Balance amount to be invested in Annuity	There would not be any purchase of annuity/ monthly pension.
If Corpus < Rs. 1 lac, then Subscriber can withdraw the entire corpus	If Corpus < Rs. 2 lac, then Subscriber can withdraw the entire corpus	The nominee, if so wishes, has the option to purchase annuity of the total corpus.

Subscribers Joining Between 60-65 Years:

Normal (Completion of The 3 Year)	Premature Exit (Before 3 Year)	Upon Death
Up to 60% of Corpus can be withdrawn in lump sum	Up to 20% of Corpus can be withdrawn in lump sum	Accumulated pension wealth (100%) would be paid to the nominee / legal heir of the subscriber
Balance (Min. 40%) amount to be invested in Annuity	Balance( Min. 80%) amount to be invested in Annuity
If Corpus < Rs. 2 lac, then Subscriber can withdraw the entire corpus	If Corpus < Rs. 1 lac, then employee can withdraw the entire corpus