PFRDA (Pension Fund Regulatory and Development Authority), India has opened National Pension System (NPS) / New Pension Scheme to all Indian citizens starting today, on 1st May, 2009.
Its a safe, flexible and portable scheme introduced by Indian Government’s cell PFRDA; to replace the existing System of Pension System in the country and to provide income security after retirement.
PFRDA was established by the Government of India to promote old age income security by establishing, developing and regulating pension funds, to protect the interests of subscribers to schemes of pension funds.
National Pension System (NPS) Highlights
Any Indian citizen will be able to start a National Pension System account and can start investing any amount up for a pension.
- Open to all citizens aged between 18-60 years
- Exit age for national pension system will be 60 years.
- Attractive investment schemes to choose from
- Professional record-keeping and fund management
- Technology driven, Transparent fee based system
- Withdrawal facility as and when you wish, under Tier II
- No entry and exit loads
- Multiple fund managers
- Multiple investment options
- Minimum Contribution per installment: Rs 500
- Minimum Contribution per year: Rs 6000
- Minimum Contributions per year : 1
Under this scheme, an investor can deposit their contributions in Bank Branches and Post offices all over the country. Unlike EPF (employee provident fund schemes), there will be only one number allotted to each investor, In case of change of job or location of job, it can be easily transferred to another branch. Each Investor will be allotted a unique 16 digit Permanent Retirement Account Number (PRAN) it will valid for life like current PAN number. There will be no need to open a new account every time you change job or location unlike the current EPF (Employee Provident Fund)
In starting, there will be 23 Points of Presence (POP) including PSU banks and post offices, and they will be provide account opening and other transactions facility. Following is the participating POP list: Allahabad Bank, Axis Bank, Bajaj Allianz General Insurance Co, Central Bank of India, Citibank, CAMS (Computer Age Management Services), ICICI Bank, IDBI Bank, IL&FS Securities, Kotak Mahindra Bank, LIC (Life Insurance Corporation of India), Oriental Bank of Commerce, Reliance Capital, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, SBI (State Bank of India), State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore, South Indian Bank, Union Bank of India, UTI.
There will be multiple choices of investment and pension fund managers. All records will be kept by Central Record-keeping Agency (CRA). Central authorities and fund manager will be providing performance reports and NAVs (Net Asset value) regularly, so investor can track and invest accordingly. In Starting, NAVs will be declared once every year and switching fund manager will be allowed only once a year.
Currently seven fund managers have been chosen LIC Pension Fund Limited, SBI Pension Funds Private Limited, IDFC Pension Fund Management Company Limited, Kotak Mahindra Pension Fund Limited, Reliance Capital Pension Fund Limited, UTI Retirement Solutions Limited and ICICI Pension Fund Management Company Limited that will manage investment money for NPS.
Fund Managers will charge very low fund management charges as compared to mutual funds.
Investment Options:
Individual will also have choice to choose from 3 different asset classes: equity (E type), Govt securities(G Type) and Credit Risk-bearing Debt/fixed income based investments (C Type).
Active Choice investment: Investor can mix these three types also as per his choice. Invester actively decide as to how NPS investment is divided into 3 options (E, C and G).
Auto Choice investment: Another option will be Auto Choice life cycle fund and the investment allocation will be done based of investor’s age. In this scheme, equity portion (Asset class E) will be 50 per cent till age 35 after which it will reduce 2 per cent per year until it becomes 10% by age 55. Credit risk portion (Asset class C) will be 30 per cent till age 35 after which it will reduce 1 per cent per year until it becomes 10% by age 55.
Investor will have option of investing monthly/quarterly, but minimum 4 investments in a year will be compulsory.
As per the notification by PFRDA, Currently only half of investment can go into equities, even if investor chooses the equities type funds. This limit will only be reviewed after a year. Deepak Parekh had suggested PFRDA to allow public to invest all saving in equities but board was not ready to do that.
There will be regular account statements and information desks to keep information transparent.
Govt has extended Swavalamban initiative under which it will contribute 1,000 Rs per year (for a period of four years) to every national pension system (NPS) account opened this year with at least a matching contribution from the subscriber.
How to make investment in NPS
Biggest problem is investment is that, a person has to visit personally to POP office every-time he/she need to make contribution. There has been some respite to investors as some of the POPs have started taking deposits online.
India’s largest bank State Bank of India has started taking NPS contribution online through the onlineSBI login account. If you have internet banking of SBI, you can make payment to NPS online. You can check NPS contribution section under Payments/Transfers tab after login.
If you have NPS account opened with ICICI and you also have bank account with ICICI, you can also transfer amount online to NPS account. You need to add NPS account as biller in online ICICI account. You can go to ‘Bill Pay’ section and add a biller under Pension category. Once biller is added you can make payment to this account. The facility for online contribution payment towards national pension system (NPS) is allowed only for NPS accounts opened through ICICI Bank. Your registration for NPS contribution will be cancelled if the NPS account has not been opened through ICICI Bank. Any payments made towards such account will be reversed within three working days. Please make contribution towards the above NPS account only after you have received confirmation for registration into the mail box of your Internet Banking account.
NPS account holders can also invest through SIP or in lump-sum from their ICICI securities account (demat and online share trading account). But as this account is held by limited Indians, its of not much help.
CAMS service for online NPS payment has not started yet and page on their site shows under construction.For Govt Employees:
All new government employees (central and state) will no longer have GPF accounts and NPS account will be mandatory for them. So all who have joined government services after 1st Jan, 2004, will have NPS account.
NPS will work on defined contribution basis and will have two parts – Part I and Part II.
Tier I – Mandatory non-with-drawable Pension Account – Monthly contribution will be 10 percent of basic salary and equal amount will be deposited by Govt. This amount will be kept in a non withdrawal Pension Tier I account.
Tier II – Voluntary with-drawable Savings Account – It will be voluntary tier-II with-drawable account from which individual can withdraw money anytime without giving reason. There will not be any contribution from Govt. side in this account.
Govt Employee can exit after age of 60 years from Tier I Scheme and it will be mandatory for him to invest 40% of pension amount to purchase an annuity through a Life Insurance Company, It will provide pension for the life time. In case of employee wants to leave NPS before age of 60, the mandatory annuity will be 80 per cent of the pension amount.
Charges:
For account opening and issuance of PRAN : 50 Rupees
Annual maintenance charge: 350 280 Rupees per year
Initial subscriber registration charge: 100 Rupees
Transaction charges and contribution upload– 0.25% of the amount, subscribed by the NPS subscriber, subject to minimum of Rs.20 and a maximum of Rs. 25000.
Fund management charge: 0.0009% per year on the fund value.
Fund switch charges: 20 Rupees.
Any other transaction not involving a contribution from subscriber – Rs 20
As of now, this charge appears to be high. Considering 12 transaction a year (one every month), investor has to pay 470 Rs a year. That’s on higher side. These charges will reduce in coming years, as number of subscriber increases.
PFRDA may ask Government to partly pay the maintenance cost to reduce overall cost for investor.
Income tax treatment:
The bad part about NPS is that the returns will be fully taxable not like EPF and PPF. It will come under exempt-exempt-taxed (EET) regime, the amount would be taxed at the time of withdrawal. NPS will not attract any Security Transaction Tax (STT) and Dividend Distribution Tax (DDT).
However PFRDA has suggested government to exempt scheme from tax, but that decision will only be taken by new government.
Update: As per new notification by Finance ministry, under Direct Tax Code (DTC), NPS will also come under EEE and withdrawal will also be non-taxable from 2011. So national pension system could become the best long-term savings option.
From April 1, 2011. Employer contribution from employer towards NPS will not be included in the Section 80 C deductions (Like what happens in case EPF currently). So if employer contributes 50,000 to your account and you contributes same amount, Your 50000 will be available for exemption under 80-C and there won’t be any income tax on rest 50,000 deposited by employer. This increasing your overall deduction claim.
Where to apply for NPS
NPS is available at selected Service Provider (SP) branches of various Point(s) of Presence, Click on link for each POP for branches address. You may also view list by state-city on this link: POP/POP-SP location details.
- Allahabad Bank 033-22104754
- Axis Bank 1800 233 5577 / 1800 209 5577 / 1800 103 5577
- Central Bank of India 022-22153691
- Citi Bank- 1800-180-0123
- Computer Age Management Services Private Ltd. 044 – 30611606 / 07/ 08
- ICICI Bank 022-28308110
- IDBI Bank Toll Free Number for MTNL/BSNL subscribers 1800-22-1070 Toll Free Number for other than MTNL/BSNL subscribers 1800-200-1947
- IL&FS Securities Ltd. 022-42493000
- Oriental Bank of Commerce 011-47651319
- Reliance Capital Ltd. 022-3046 2300
- State Bank of Bikaner & Jaipur 18001806005
- State Bank of Hyderabad 09866582590/04023387471
- State Bank of India 1800 112211
- State Bank of Indore 1800-425-2241
- State Bank of Mysore 1800-425-2244
- State Bank of Patiala 1800 180 2010/0172-2648011
- State Bank of Travancore 18004255566
- The South Indian Bank 1800 843 1800 (Toll free)/1800 425 1809(Toll free)/0484 235 1923
- Union Bank of India 1800-022-2244
- UTI Asset Management Co. Ltd 1800221230
- Kotak Mahindra Bank 1800-102-6022
For more information, application form & offer document, walk into your nearest Service Provider branch of the above-mentioned Point(s) of Presence.
Application Forms
NPS (New Pension Scheme/System) - Application Form (456.0 KiB, 19,163 hits)
New Pension Scheme/System (NPS) - Offer Document (2.9 MiB, 13,975 hits)
New Pension System (NPS) - Welcome Kit (1.2 MiB, 9,165 hits)
NPS (New Pension Scheme) - Investment Guidelines (73.8 KiB, 10,438 hits)
New Pension System (NPS) Contribution Instruction Slip (NCIS) (15.1 KiB, 8,376 hits)
NPS Scheme Preference Change/Switch form (26.9 KiB, 3,221 hits)
Swavalamban Yojana Declaration Form (139.7 KiB, 3,460 hits)
Subscriber request form to change Point of Presence (POP) (63.3 KiB, 3,292 hits)
Subscriber request form to change POP-SP (16.4 KiB, 3,277 hits)
UOS-S12 Withdrawal form for Tier II account under NPS (47.0 KiB, 3,068 hits)
Request form for change in signature and/or change in photograph (12.8 KiB, 2,859 hits)
Request For Change/Correction in Subscriber Master details And/Or Reissue of I-Pin/T-Pin/PRAN Card (402.9 KiB, 3,175 hits)
Request for Activation of Tier-II account under New Pension System (NPS) (215.3 KiB, 3,624 hits)
S1 - Subscriber Registration form to get PRAN (61.3 KiB, 3,378 hits)
Sir, is there any government rules that 60% NPS withdrawal will not be taxed. What every one say is that NPS on retirement is taxable
@Bharath
Amount invested in annuity and received back as monthly pension would be taxable. But remaining amount received as lump sum would not be taxable.
Sir,
1. Of course if the monthly pension exceed taxable exemption limit tds will be deducted as in case of salaried employees. My question is whetherl the annuity amount of 40% paid after the death of government servant, his spouse and parents to children or blood relations are taxable.
2. I also want to know if the 60% NPS pension wealth given at the time of retirement is not taxable as stated by you, whether any government order is there.
I shall be grateful for a reply
@Bharath
Amount received after death of person won’t be taxable in hands of survivor.
As of now, it comes under EET, but with direct tax code it would come under EEE.
Send me adress of pop/ s.p in allahabas
hallo sir may
may janana chahta hu nps abhi kya intrst rate h kitna % rent h
Sir,
I had a PRAN CARD as i was working in central govt and I regin (not tech regin) my job and now i joined new job which is also comes under central govt. Sir, due to lack of knowledge I again applied for PRAN NUMBER and issued new one. Later it is come to hear that PRAN NUMBER is portable and it is used in any govt. Job.
A sum of rs. 200000/_ is credited in my old account. Now my question is that amount credited into my prev PRAN can be transferred into new PRAN? If so what is the procedure of same? If not what should I have to do in this situation?
@Pinku
As of now there is no document available to merge two accounts. But you can call NPS call center 1800-222-080 to get more information.
Sir I have called on above number in several times but every time ask for input user id like t pin etc but I am failed to give the same as don’t know what he wants or i have or not and my phone disconnected. Sir necessaru guidline may please be issued to me.
@Pinku
You can try other numbers mentioned on this page: https://npscra.nsdl.co.in/contact-us.php
Respected Sir,
I want to know that i had a Pran card since 2010 bcoz of my govt. Job now i left my job.
I have a balance of 150000 rs in my account
can i debit my balance from this account and How is it possible????
Help..
@Pradeep
Its difficult to get old account closed as account can generally be closed at retirement. But there is a clause of closing account at the time of resignation. If you have not taken proper reliving from earlier job, they may not close account. Even after closing you would get only 20% amount, rest 80% you have to buy annuity plan which would pay you a pension.
EPF account Person open in NPS accounts?
One person EPF And NPS open
@Vinod
Yes, EPF account holder can open NPS account also. No issues in that.
Sir I want to know about NPS scheme plz call mobile no. 9896073100 plz plz call
A Govt Employee availing NPS and opted VRS and want to continue his account ,can he do it.and.what.is the formalties ?
@Sunil
First of all, you would need to shift your account from Govt employee to individual account.
For that, you would need to fill and submit inter sector shifting form (https://npscra.nsdl.co.in/download/government-sector/central-government/forms/Intersector%20Shifting%20-%20Form%20ISS-1.pdf).
Once this is done, you can continue investing in account.
sir i want to join in nps
but in tuticorin where can i get application form and
is their any authoriesed dealers in tutucorin for seeking some
details like postoffice etc
@Naveen
There are so many banks offering NPS in your city.
Check their address and contact details on this page: https://npscra.nsdl.co.in/pop-sp.php after selecting state and city.
dear sir,
i am intrested please call me nps progaram detials per year scyme plz call me 09770850197
I changed my job from a nationalised bank(having PRAN A/C) to india post in february 2015.So I have to fill subscriber shifting form(ISS-1 sec. C. shifting to central govt. sector).Should I have to write same bank details(i.e. old PRAN A/C associated bank details) or india post salary a/c details? actually I want to close the old bank a/c(which is located in a distant district from my present job location).
@Atanu
You can also change linked bank account with NPS in same form.
ok thanks.
hi, i would like to interact you directly since i too have the same query
I am working in a central govt. but now i have got selected in state govt. but my present employer is not relieving me but i still be joining. please guide whether my nps account can be transfered without intimating the present employer.. Also, can i open a new nps in new job.
@Sunil
You would need to fill ISS form (https://npscra.nsdl.co.in/download/government-sector/central-government/forms/IntersectorShifting-Form.pdf) for sector shifting.
If you open new NPS, old amount you may not get back before 60 years and also get fine for non-contribution.
Sir,
I just want to enquire if I open a NPS account with HDFC and with HDFC Pension Management Company Limited as my fund manager and opt for auto choice. The type of securities in which money is being invested will be decided by HDFC only or even I do have a say to select the securities in which amount can be invested.
@Shweta
In case you opt for Auto choice, it would be divided automatically in a ratio depending on current age among equity, debt and govt bonds.
I want to open a NPS account only and the existing EPF scheme to discontinue and the total deposited amont can be transferred to new NPS.Wheter it would be a benificial option for me.
rgds
scp singh
@SCP
I won’t advise moving whole EPF amount to NPS, as money would be locked till 60 years.
Sir’
RRC hubli ke registration form mein PF no/NPS no ka ek colum hai usme kya fill kiya jaye!
please sir answer me!
I have NPS Lite-Swavalamban account with valid PRAN Card. I would like to know :
a) Is it possible to make remittance/contribution to NPS Lite-Swavalamban account through SBI/SBM net banking facility?
b) Is it mandatory that the remittance/contribution to NPS Lite-Swavalamban account is made through the aggregator with whom the account is opened? or is it possible to make contribution through some other aggregator in some other location across India to the account?
@Ramprasad
1. Yes, you can contribute using SBI net banking facility. You would only need PRAN details.
2. There is no restriction of contribution with service provider. You can deposit anywhere quoting PRAN.
I had sent same query to CRA (i.e.,NSDL) and they have confirmed that online remittance facility for NPS Lite not available as of now and all contribution/remittance to NPS Lite account should be made only through aggregator with whom account has been opened.
Sir,
During PRAN shift due to job change (from nationalised bank to postal dept), should I need to inform(need to take permission) about shifting to my past employer(bank) or is shifting can be done through present employer(india post)?
@Atanu
There is no permission required, but you would need to fill details about previous employer in form.
Hello – Can an individual open both NPS and EPF accounts? Or is it like if I opt for EPF then I cannot open NPS and vice versa?
Thanks!
@Madhav
One can have both accounts and there is no issue in that.
I also have both.
Thanks Pankaj
i work for pran card