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Wealth creation for your retirement
Save additional tax on investments upto ₹ 50,000
Enjoy regular pension income on retirement
NPS - National Pension Scheme
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Why should you invest in NPS?

  • Wealth creation for your retirement over the long term.
  • Invest upto Rs. 2 lakhs in NPS. Tax deduction of ₹ 50,000 available under section 80CCD(1B) over & above ₹ 1.5 Lakh available under Section 80C.
  • Get started with investments as low as ₹ 1000
  • Invest in a mix of equity, corporate bonds and government debt
  • Extremely low fund management fees at 0.01%
  • Choose from any of 7 Pension Fund Managers.
  • Invest in both Tier I - Tax saving scheme and Tier II - any time withdrawal scheme
NPS Investments

Benefits of National Pension System (NPS)

Quick Account Opening
Open your NPS account instantly with minimal KYC documents.
NPS Account
Save Additional Tax of upto ₹15600
Additional deduction of ₹50,000 from your taxable income over and above Rs. 1.5 Lakhs under Section 80(C)
NPS Tax Saving
Accumulate a Large Corpus
Ensure regular pension income for your retirement.
NPS Interest Rate
Real Time Portfolio Tracking
Choose from any of the 7 Fund managers and track your returns in real time.
NPS Portfolio

Know more about NPS (National Pension System)

1. What is National Pension System (NPS)?

The National Pension System is a pension scheme introduced by the Government of India to help Indian citizens create a retirement corpus. Under this, you can make systematic contributions in a profitable avenue that would provide you market-linked returns and a regular income in your post-retirement life.

2. Who should invest in NPS?

Any individual citizen of India (both resident and Non-resident) between the age of 18-60 years can join NPS. Overseas Citizen of India(OCI) are also eligible to join NPS.
NPS is a smart model that enables you to chalk out an investment plan for retirement in a proactive manner. It falls in line with the fundamental principle of investing that encourages individuals to start investing from a very early age to enjoy greater wealth accumulation.

3. Why should you invest in NPS ?

a. Corpus at retirement

NPS allows a subscriber to accumulate a corpus for retirement. NPS ensures regular pension income in the hands of the subscriber. A subscriber can withdraw upto 60% of the accumulated corpus at the age of retirement. The remaining corpus can be converted into an annuity, thus proving a regular pension income.

b. Extra Rs. 50,000 deduction from Taxable Income

Additional deduction of upto Rs.50,000 can be availed under section 80 CCD(1B) over and above Rs. 1.5 Lakh deduction under section 80C. You can also invest upto Rs. 1.5 Lakhs in NPS under Section 80C.

c. Market linked returns

National Pension System (NPS) allows a subscriber to invest in four asset classes such as Equity, Corporate debt, Government Bonds and Alternative Investment Funds. A NPS subscriber can decide allocation amongst there 4 asset classes.

d. Auto rebalancing

NPS provides auto-rebalancing option to the subscriber. The portfolio is rebalanced once every year. NPS automatically rebalances the portfolio on the subscriber’s age, shifting allocation from equity to debt as the subscriber grows older.

e. Choice of Pension Fund Manager

NPS allows a subscriber to choose from 7 Pension fund managers that are appointed by PFRDA( Pension Fund Regulatory and Development Authority of India). A subscriber can choose a fund manager based on the track record of the manager and preference. At present, you can choose any one of the following pension funds:
  • ICICI Prudential Pension Fund
  • LIC Pension Fund Ltd
  • Kotak Mahindra Pension Fund
  • SBI Pension Fund
  • UTI Retirement Solutions Pension Fund
  • HDFC Pension Management Company Ltd
  • Birla Sunlife Pension Management Ltd.

4. What are the features of NPS?

a. PRAN Generation:

NPS allows a subscriber to choose from 7 Pension fund managers that are appointed by PFRDA( Pension Fund Regulatory and Development Authority of India). A subscriber can choose a fund manager based on the track record of the manager and preference. At present, you can choose any one of the following pension funds:

b. Fund Management:

Pension Funds are responsible to manage your pension corpus and invest your fund contributions as per the investment guidelines issued by the PFRDA. Such guidelines are framed in a manner that provides you with the optimal risk-return combination. The NPS portfolio is well-diversified that consists of Government securities, Corporate Bonds, and Equities. At present, you can choose any one of the following pension funds:
  • ICICI Prudential Pension Fund
  • LIC Pension Fund Ltd
  • Kotak Mahindra Pension Fund
  • SBI Pension Fund
  • UTI Retirement Solutions Pension Fund
  • HDFC Pension Management Company Ltd
  • Birla Sunlife Pension Management Ltd.
However, PFRDA may modify this list by adding or removing new/existing pension fund managers.

c. Withdrawal Norms:

You can exit from NPS and withdraw the accumulated corpus subject to certain conditions.

Withdrawal at the time of retirement:

  • You can redeem 60% of the accumulated corpus upon the attainment of 60 years of age. You are required to purchase an annuity plan with the remaining 40% of the corpus. If the value of your accumulated corpus is up to Rs 2 lakh, then you may withdraw the entire corpus in a lump sum.

Withdrawal before the age of retirement.

  • You can withdraw 20% of the accumulated corpus if you want to exit before the age of 60 years. You are required to purchase an annuity plan with the remaining 80% of the corpus. If the value of your accumulated corpus is up to Rs 1 lakh, then you may withdraw the entire corpus in a lump sum. You need to complete a minimum of 10 years before you can exit from NPS.
  • Upon your death, your nominee would receive the entire accumulated corpus and he/she would get an option to purchase an annuity plan with the corpus received.

5. What are the tax benefits of investing in NPS?

You can build wealth for your post-retirement years with effective investments in NPS over the long term. In addition to this, NPS also offers tax benefits as follows:

a. If you are a Salaried Individual:

  • Your contributions towards NPS up to 10% of Salary (Basic + Dearness Allowance) are eligible for a tax deduction under Section 80CCD(1) of the Income Tax Act 1961, subject to a ceiling of Rs 1.5 lakh of Section 80C.
  • An additional investment of Rs 50,000 is eligible for a tax deduction under Section 80CCD(1B) of the Income Tax Act 1961.

b. If you are a Self-employed Professional:

  • Your contributions towards NPS up to 20% of Gross Annual Income are eligible for a tax deduction under Section 80CCD(1) of the Income Tax Act 1961, subject to a ceiling of Rs 1.5 lakh of Section 80C.
  • An additional investment of Rs 50,000 is eligible for a tax deduction under Section 80CCD(1B) of the Income Tax Act 1961.

6. How to open an NPS account?

If you wish to open an NPS account, you may visit any authorised Point of Presence (PoPs) or any bank branch (private and public sector) that are enrolled to act as PoP. You need to submit the following documents to open an NPS account:
a. Completely filled in subscriber registration form
b. Proof of Identity
c. Proof of Address
d. Age/date of birth proof
e. Cancelled Cheque (if applicable)
You can also open an NPS account online through eNPS if you have:
a. Aadhaar Card, or
b. PAN card with Savings account in one of the authorised banks that perform KYC verification online.

7. What types of NPS accounts are available for investment?

NPS offers you two types of accounts i.e. Tier I & Tier II.
The Tier I account is mandatory while you have the option to invest in the Tier II account as an add-on voluntary savings facility. You become eligible to withdraw the retirement corpus from the Tier I account only upon the completion of 10 years from the date of opening of the account or on attaining the age of 60 years, whichever is earlier. However, in the case of a Tier II account, you can make withdrawals at any point in time as per your requirement. Also, in Tier I, you are required to make minimum contributions of at least Rs 1000 annually. But no such restrictions exist for a Tier II account with respect to the minimum frequency of contributions.

8. How does NPS fare as compared to other tax-saving investments?

You may find a number of popular tax-saving investment avenues available under Section 80C of the Income Tax Act 1961 like five-year Fixed Deposits (FDs), Public Provident Fund (PPF), ELSS funds, National Pension System, among others. However, you need to consider your financial goals, risk appetite, and investment horizon to invest in the right alternative.
FDs and PPF can fit the debt component of your overall investment portfolio and you may invest some portion of your portfolio towards them. But their fixed-income nature may not help in wealth accumulation. Besides, the lock-in period of 5 years and 15 years respectively makes them relatively less liquid.
Investing in ELSS Funds and NPS makes sense to earn higher market-linked returns. You should know that NPS has a higher lock-in period than ELSS funds that has the shortest lock-in period of 3 years. Additionally, if you want to take aggressive exposure to equities, then you may not get that in NPS since the maximum allocation to equities is limited to 75%. As against this, you might be better off with ELSS Funds that allocate as high as 90% of the invested corpus towards equities. In such a scenario, the risk profile of ELSS Funds would be higher than that of NPS.
Hence, based on these parameters, you can choose an instrument accordingly to fulfill your wealth creation and tax-saving goals.
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Registered with the Securities and Exchange Board of India (SEBI) as an Investment Advisor (INA100009859) and with Pension Fund Regulatory and Development Authority (PFRDA) as NPS ePOP (269042019).
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Investments in securities are subject to market risks, read all scheme related documents carefully before investing.
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