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NPS Scheme - National Pension System

Plan your retirement with
National Pension System

  • sda

    PFRDA Regulated

  • ds

    Voluntary Investment Plan

  • sad

    Eligible for 18-70 Years

  • gj

    Launched by Government of India

NPS Banner A father and daughter telling about nps pension Benefits

About National Pension System Scheme

 

The National Pension System (NPS) is a government-backed retirement savings plan that supports security in one's working years by enabling individuals to save consistently throughout their careers and accumulate a significant retirement fund over time.

 

While retiring from work, NPS offers a combination of one-time lump sum payments and periodic income to ensure lasting peace of mind. The scheme's management falls under the Pension Fund Regulatory and Development Authority (PFRDA) oversight, which guarantees openness and responsibility in its operations. Planning for a comfortable retirement is made easier with NPS, which is an effective option. 

Calculate Investment Return with the NPS Scheme Calculator

Calculate your National Pension System (NPS) investment returns today and start planning for a secure and better tomorrow. Get started now!

Years
  • 18
  • 60
per month
  • ₹ 500
  • ₹ 500000
%
  • 40%
  • 100%
Years
  • 60
  • 75
%
  • 5%
  • 15%
%
  • 5%
  • 15%

₹3,25,006

₹84,25,006

₹84,25,006

45

₹42,125

₹1,68,50,012

Why Invest in National Pension System (NPS)?

Tax Benefits

Tax Benefits

With NPS, You can avail additional deduction of upto Rs. 50,000 under 80CCD(1B) over and above deduction of upto Rs. 1.50 lakh under 80C.

240
Triple E Income Benefits

Triple E Income Benefits

Tax exemption on the Investment, Returns & amp;  maturity amount.

240
Retirement Benefits

Retirement Benefits

The NPS ensures a secure retirement with a lump sum at retirement age and an attractive monthly pension after retirement.

240
Investment Benefit

Investment Benefit

The NPS offers maximum returns on investment by leveraging the power of compounding for a better retirement.

240
Cost Benefit

Cost Benefit

The NPS is a low-cost retirement product with an annual investment cost of just 0.01%.

240

How does National Pension System (NPS) work?


Begin your National Pension System (NPS) investment as early as age 18 to benefit from great, 

steady returns by the time you reach 60.

National Pension System Scheme Journey Start to Maturity

Who Should Invest in the National Pension System (NPS)?

The National Pension System Scheme is ideal for those looking to plan their retirement early with a low-risk approach. By regularly contributing to the NPS scheme, you ensure a steady income and financial security in retirement.

If you're salaried and want to maximise tax benefits under Section 80C, the NPS Pension is a valuable addition to your investment strategy. With its focus on long-term growth and stable returns, the NPS offers peace of mind for your financial future. For more details, explore the NPS pension scheme details and start your national pension system account online.

Types of NPS Accounts & Contributions

The National Pension System (NPS) offers two types of accounts: Tier 1 (mandatory) and Tier 2 (voluntary). A Tier II account requires a Tier I account and differs in tax benefits and withdrawal rules.     

  1. Tier 1 Account: Government employees contribute 10% of their base pay plus DA, while others invest a minimum of Rs. 500 initially and Rs. 6,000 annually.
  2. Tier 2 Account: Does not offer tax breaks or matching contributions but allows flexible withdrawals anytime. Opening a Tier II account requires an initial payment of Rs. 1,000 and subsequent top-ups of Rs. 250, maintaining a yearly balance over Rs. 2,000.

Features and Benefits of NPS

The National Pension System (NPS) offers a range of benefits and features that make it a top choice for retirement planning:

  • Regulated: Managed under the PFRDA (Pension Fund Regulatory and Development Authority), the NPS is governed by transparent guidelines and regular monitoring by the NPS Trust.
  • Voluntary Participation: Available or Open to all Indian residents, citizens between 18 to 70, the NPS scheme provides flexibility in investment amounts and timing according to their financial goals and risk tolerance.
  • Flexibility: Choose or change your Point of Presence (POP), investment pattern, and fund manager to optimise returns.
  • Cost-effective: Offering one of the lowest fees among other investment options, the NPS ensures economical long-term savings.
  • Portability: Your National Pension System account and PRAN remain unchanged, even with job changes or relocations.
  • Superannuation Fund Transfer: Allows tax-free transfer of superannuation funds to your NPS pension system account, subject to approvals.
  • Tax Advantages: Triple tax benefits make the NPS a smart choice for reducing taxable income. NPS Scheme helps salaried employees individuals and self-employed individuals reduce their taxable income significantly;
    • Section 80CCD (1): Claim up to 10% of basic salary + dearness allowance for employees; and up to 20% of gross annual income for self-employed people, both subject to a maximum limit of Rs. 1,50,000 under section 80C.
    • Section 80CCD (1B): Enjoy additional tax deductions worth up to Rs. 50,000 beyond the limits set by section 80C.

Investments Option

When planning your investments with the NPS scheme, you can choose between:

Active Choice:

  •  Offers the freedom to customise your portfolio across four asset classes: Equity (E), Corporate Bonds (C), Government Securities (G), and Alternate Assets (A).
  •  Ideal for those investors confident about market movements, managing risk, and willing to assume the responsibility of balancing their portfolios.
  • You decide how much to allocate to each class based on risk tolerance and potential return: Equity (E) offers high returns with high risk, Government Securities (G) are low risk, and Alternate Assets (A) are highly volatile with a 5% cap.

Auto Choice (Life Cycle Fund):

  •  Suitable for those hesitant or unfamiliar with actively designing their portfolios.
  • Allocation adjusts automatically based on age: higher equity exposure in younger years, reducing as you age to lower risk.
  •  Three options are available: LC 75 (75% maximum equity exposure), LC 50 (moderate exposure), and LC 25 (conservative exposure) based on your risk tolerance.

How to Open NPS Account

An NPS account can be opened with ease through ICICI Bank's simplified online facilities. Here are the two ways how to open NPS account online with ICICI Bank:

 

NPS Account with iMobile App:

To open your NPS account with ICICI Bank, follow the steps below:

  •  Log in to the ICICI Bank iMobile Pay app.
  • Click the "Invest" section.
  •  Find the “NPS” feature.
  •  Fill in all the required details such as your investment amount, personal information, and nominee details.
  • Now, upload your photo and signature.
  • After verifying the information, submit your application through the app.

 

NPS Account with ICICI Bank Net Banking:

Here’s how you can open an NPS account online through Net Banking facility of ICICI Bank:

  •  Log in to the ICICI Bank Net Banking.
  • Find the section, “Investments and Insurance”.
  • Next click “National Pension System”.
  •  Fill your investment amount, personal information, and nominee details.
  •  Next, upload your photo and signature.
  •  Confirm the details and click “Submit”.

 

Please note: Your first contribution to the NPS account must be made online within 45 days of PRAN generation to avoid account freezing.

Tax Benefits of NPS for Salaried Individuals and Self Employed Individuals

The NPS offers tax advantages and is a wise option for both employed individuals and self-employed individuals looking to build savings for their retirement years. Here’s how -

Tax Benefits for Salaried Employees

  • Section 80CCD(1) - You can avail yourself of a tax deduction of a maximum of 10% of your salary and an allowance subject to a limit of Rs. 1.5 lakh.
  • Section 80CCD(1B) - In addition to that benefit is a deduction of Rs. 50,000 on top of the Rs. 1,50,000 limit in Section 80CCDB (I).
  • Section 80CCD(2) - In case your employer makes contributions to your NPS account also qualifies for a deduction beyond the limit of Rs. 1.5 lakh.

Tax Benefits for Self-Employed Individuals

 

  • Section 80CCD(1B) - You can claim up to Rs. 50,000 plus 20% of your gross income as a deduction, up to a Rs. 1.5 lakh limit.
  •  Section 80CCD(2) - Any contributions you or your employer made to NPS also qualify for deductions.

Additional Perks

NPS enables you to access a tax withdrawal of up to 60% of your retirement funds and enjoy savings benefits while offering flexible contribution options suitable for both employees and self employed individuals alike. Additionally providing advantages such as management fees for funds and the ability to transfer accounts easily along with exposure to equities for returns and the option for partial withdrawals, in case of emergencies ensures a stable financial future during retirement. 

Corporate Benefits of NPS Scheme

The Corporate NPS model is a variation of the National Pension System established by the Pension Fund Regulatory and Development Authority (PFRDA). It enables companies to offer their employees a defined retirement savings plan that's tax efficient as part of their benefits package. With this program, employers can play a role in securing their employees’ future while also enjoying benefits in terms of retirement savings and tax perks. The Corporate NPS model simplifies the way businesses provide retirement benefits through the employer to worker connection and is becoming increasingly popular for its flexibility and cost efficiency for companies as its valuable financial rewards for employees. 

Key Corporate Benefits of the NPS Model

  • Cost effectiveness

A key advantage of the Corporate NPS model is its cost effectiveness, for businesses compared to retirement plans in the market. Unlike pension schemes that come with additional administrative and fund management fees the NPS does not burden companies with such extra costs. This feature makes it a compelling choice for organisations looking to offer retirement benefits while keeping their expenses in check. Opting for NPS allows companies to secure coverage, for their employees without putting pressure on company resources.

  • Ease of setup

Establishing the Corporate NPS framework is simple and convenient, without any complications involved in comparison to retirement plans where separate trusts are necessary for overseeing staff donations by companies themselves. The NPS model offers a procedure for including or excluding employees from the system which simplifies the management as your staff evolves over time. This ease enables companies of all sizes, ranging from startups to established corporations to seamlessly introduce and oversee the program with ease.

●      Personalisation

The Corporate NPS model offers a level of customisation to meet the requirements of employers and employees alike. Employers have the flexibility to determine the contribution structure—be it a percentage of the employees pay or an optional participation method. Employees are also empowered to tailor their NPS investments by selecting their contribution amounts and deciding on asset classes like stocks, government bonds, or corporate securities for their investments. This customisation ensures that the strategy aligns with the objectives of both the company and its staff members. 

Tax Benefits for Employers and Employees

For Corporates

One major benefit of implementing the Corporate NPS program is the tax advantages it offers to the company. Companies have the option to contribute a maximum of 10% of an employees salary and dearness allowance to NPS. These contributions are entirely exempt from taxes under Section 80CCD (2). This feature not only helps organisations in handling their tax responsibilities but also enables them to offer important retirement benefits to their employees without facing substantial financial strains.

For Employees

Employees also receive tax advantages through NPS as their contributions qualify for tax deductions under sections of the Income Tax Act in India. For example in Section 80CCD(1B) employees can seek a deduction of up to Rs. 50,000 in addition to the existing Rs 1.5 lakh limit under Section 80 C. These deductions enhance the appeal of NPS as a tax investment option for employees by enabling them to lower their income and simultaneously create a robust retirement corpus. 

Entities involved in NPS

The National Pension System (NPS) is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) to ensure transparency and efficiency.

 

  • PFRDA promotes old-age income security by overseeing pension funds and protecting subscriber interests.
  • The NPS Trust manages the funds and conducts regular audits of Pension Fund Managers to safeguard subscribers.
  • Central Recordkeeping Agencies (CRA) like K-Fin Technology and NSDL e-Governance manage subscriber data and provide administrative support.
  • ICICI Bank, as a Point of Presence (POP), facilitates NPS subscriber registration, contribution submissions, and withdrawal requests. ICICI Bank serves as the first point of interaction for subscribers in the NPS system.

NPS Withdrawal / Exit

NPS subscribers can exit the system under three circumstances:

 

  1. On reaching 60 years: Subscribers must use at least 40% of their accumulated pension wealth to purchase an annuity for a monthly pension, with the remaining paid as a lump sum. If the corpus is less than ₹5 lakh, 100% can be withdrawn as a lump sum. Subscribers can defer withdrawals or continue contributions until the age of 75.
  2. Before 60 years: If a subscriber exits after 10 years of participation, 80% of the pension wealth must be used for an annuity, with the remaining paid as a lump sum. For a corpus under ₹2.5 lakh, 100% can be withdrawn.
  3. Death: Nominees can claim 100% of the pension wealth in a lump sum or continue with NPS after completing the necessary KYC.

Claims are processed by the ICICI Bank with an online option for ease.

 

How to invest in
National Pension System (NPS)?

  • iMobile Pay App
  • Net Banking
  • 01. Login to ICICI Bank iMobile Pay app> Invest and Insure> Instant NPS
  • 02. Fill all the required details (Investment, Personal, Nominee details & Upload your photo and signature)
  • 03. Confirm all your details and then submit.
National Pension Scheme (NPS) Investment and Benefits
  • 01. Login to ICICI Bank Net Banking> Investments and Insurance> National Pension System
  • 02. Fill all the required details (Investment, Personal, Nominee details & Upload your photo and signature)
  • 03. Confirm all your details and then submit.
National Pension Scheme (NPS) Investment and Benefits
Diversify your investment portfolio graph with NPS contributions

How to make contribution in National Pension System (NPS)?

  • Login to ICICI Bank Net Banking> Investments and Insurance> National Pension System
  • Click on Make Contribution & fill all the mandatory details.
  • Preview the details filled and click on ‘Submit’ to register the biller and fund the NPS Account.

Please Note: First contribution towards National Pension System (NPS) needs to be made online within 45 days of PRAN generation or the Account will be frozen.

National Pension System (NPS) FAQs

What is National Pension System (NPS)?

NPS is an easily accessible, low cost, tax-efficient, flexible and portable, voluntary defined-contribution, retirement savings scheme introduced by the Government of India and regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

What are the key features of NPS?

1. Regulated - NPS is regulated by PFRDA, which is established through an Act of Parliament (PFRDA Act 2013)

2. Pension for all - can be voluntarily subscribed by any Indian citizen (resident/non-resident/overseas citizen)

3. Low cost – NPS is one of the low cost pension schemes in the world

4. Flexible - Subscribers have various options to choose from - Point of Presence (PoP), Central Recordkeeping Agency (CRA), Pension Fund and Asset Allocation, etc. The choices exercised can be changed subsequently

5. Portable – NPS Account can be transferred across employment, location(s)/geography(ies)

6. Tax efficient – Tax incentives are available to the subscribers under the Income Tax Act 1961.

7. Optimum returns – Market linked returns based on the investment choice made by the subscriber

8. Transparent – Subscribers can access their NPS Accounts online 24X7 and public disclosures are mandated.

What is the eligibility criteria for NPS?

To qualify for the National Pension Scheme, the following criteria must be met:

  • Indian Citizens: Both resident and non-resident Indians, as well as Overseas Citizens of India (OCI), are eligible to open an NPS account.
  • Age: Applicants must be between 18 and 70 years old.
  • KYC Compliance: Must adhere to Know Your Customer (KYC) norms.
  • Exclusions: Hindu Undivided Families (HUFs) and Persons of Indian Origin (PIO) are not eligible for the NPS scheme.
  • Individual Account: The NPS is an individual pension account and cannot be opened on behalf of someone else. The applicant must be legally competent to execute a contract as per the Indian Contract Act.

What is the All Citizen model?

 

You are eligible to open your NPS account if you are a citizen of India whether resident, non-resident or an Overseas Citizen of India , if you fulfil the following conditions: You should be between 18 and 70 years of age as on the date of submission of your application to the PoP / PoP-SP, or online through e-NPS

What is a Corporate model?

This model is applicable for the employees working with corporates. Under this model, employee as well as the employer (on behalf of the employee), both can contribute towards the NPS Account of the employee.

Is NPS a good Investment Option?

Yes, the National Pension System (NPS) is where investors can contribute some amount of money at regular intervals until retirement. After retirement, investors can withdraw this accumulated amount to use for their needs. In this way, the NPS Scheme acts as a good long term investment for your money after retirement.

How can I log in to NPS Online?

Here are the steps to follow for logging in to your NPS account online:

  1. Visit the NSDL NPS portal (https://enps.nsdl.com/eNPS/NationalPensionSystem.html).
  2. Click "Login with PRAN/IPIN".
  3. Enter your PRAN and password, then click "Submit" to access your E-NPS account.

For first-time login

  1. Click "Reset Password".
  2. Enter PRAN, date of birth, new password, confirm password, and captcha.
  3. Click "Submit".
  4. Enter the OTP received on your registered mobile number to confirm.
  5. Login using your PRAN and new password.