Government

NPS National Pension Scheme

National Pension Scheme Complete Details:

The NPS or also known as National Pension Scheme is managed by the PFRDA or the Pension Fund Regulatory and development authority. It is a pension scheme which helps the retiree to fulfill different retirement needs. It is the cheapest retirement plan that is available in the Indian subcontinent. The National Pension System was first introduced in the year 2004. The major aim of the NPS has always been to instill the habit of savings for the retirement phase among senior citizens of the country.

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The NPS can provide tax benefits to the people up to Rs.50, 000 and under the section 80C, an additional Rs.150, 000 is also made. So it is a good pension scheme as a financial backup for those who do not have a family. The NPS has also been coupled with the “Swavalamban Scheme” which states that the government will contribute Rs.1000 for an NPS subscriber who contributes a minimum of Rs.1000 and a maximum of Rs.12000 every year.

Different National Pension Schemes:

National Pension Scheme is of two different types – Tier I and Tier II. These two accounts are completely different and here is some important information about these.

Tier I account – this is the basic NPS account which has limited withdrawals and here the two types of withdrawals that can be considered.

  • When the contributor reaches the age of 60 years he/she will be able to withdraw only 20% of the overall contribution they have made. While the rest 80% has been used for purchasing the annuity from the life insurer.
  • The candidate can also withdraw 60% of their contributed sum whereas the remaining 40% will be used to purchase the annuity from a life insurer.

Tier II account – the tier II account is a voluntary saving choice for the people who want to withdraw their money without any limit. However, a person may choose to open a Tier II account alongside the Tier I account.

Eligibility for Applying National Pension Scheme:

Here are the important eligibility criteria for NPS –

  • The applicants of NPS must be between the age of 18 years to 60 years.
  • The minimum amount that needs to be contributed per annum for NPS is Rs. 1000.
  • Must be a citizen of India.
  • Have cleared all the necessary KYC norms.
  • NPS rules, PIO and OCI are not eligible.

Benefits of National Pension Scheme:

NPS comes with some important and convenient benefits which makes it such a brilliant pension plan.

  • NPS is flexible and provides a lot of different options when it comes to investing money. It does not involve any major contribution of money.
  • NPS is very easy to apply for and can also be done via the online website. So it much convenient for everyone to apply for.
  • It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and thus it is secure and safe.

So here are the important details and information about the National Pension Scheme which you should know about.

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