NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings
account. Under the NPS, the individual contributes to his retirement account and also his
employer can also co-contribute for the social security/welfare of the individual. NPS is
designed on Defined contribution basis wherein the subscriber contributes to his account, there
is no defined benefit that would be available at the time of exit from the system and the
accumulated wealth depends on the contributions made and the income generated from
investment of such wealth.
The greater the value of the contributions made, the greater the investments achieved, the
longer the term over which the fund accumulates and the lower the charges deducted, the
larger would be the eventual benefit of the accumulated pension wealth likely to be.
Contributions + Investment Growth – Charges = Accumulated Pension Wealth
(Individual contribution as well as co-contribution from Employers)
Who can Join NPS?
Any citizen of India, whether resident or non-resident, subject to the following conditions:
- Individuals who are aged between 18 – 60 years as on the date of submission of his/herapplication to the POP/ POP-SP. The citizens can join NPS either as individuals or as an employee-employer group(s) (corporates) subject to submission of all required information and Know your customer (KYC) documentation. After attaining 60 years ofage, you will not be permitted to make further contributions to the NPS accounts.
Can an NRI open an NPS account?
Yes, a NRI can open an NPS account. Contributions made by NRI are subject to regulatory requirements as prescribed by RBI and FEMA from time to time. If the subscriber's citizenship status changes, his/ her NPS account would be closed.
Yes, a NRI can open an NPS account. Contributions made by NRI are subject to regulatory requirements as prescribed by RBI and FEMA from time to time. If the subscriber's citizenship status changes, his/ her NPS account would be closed.
If I have invested in any other Provident Fund, can I still invest in NPS?
Yes. Investment in NPS is independent of your contribution to any Provident Fund.
I have invested in pension funds of non-government / private entities. Can I still invest in NPS?
Yes. Investment in NPS is independent of your subscription to any other pension fund.
How and where can I open a NPS account?
NPS is distributed through authorized entities called Point of Pre ence (POP’ ) and almo t all
the banks (both private and public sector) are enrolled to act as Point of Presence (POP) under
NPS apart from several other financial institutions. To invest in NPS, you will be required to
open a NPS account through the Point of Presence (POP) and who will assist the subscriber in
opening the account including the filling up of necessary forms, providing the information about
NPS and any other relevant information in this regard.
Who is a POP/POP-SP and what is their role?
Points of Presence (POPs) are the first points of interaction of the NPS subscriber with the NPS
architecture. The authorized branches of a POP, called Point of Presence Service Providers (POPSPs),
will act as collection points and extend a number of customer services to NPS subscribers
including requests for withdrawal from NPS.
How can we find location/ address of POP-SP nearest to the place where I live for opening a
NPS account?POP-SP location can be accessed through website of PFRDA. This can also be accessed through
below mentioned link of CRA’ web site:
https:/ /www.npscra.nsdl.co.in/pop-sp.php
How will I know about the status of my PRAN application form?
Subscriber can check the status by accessing CRA website: https:/ /cra-nsdl.com/CRA/ by using
the 17 digit receipt number provided by POP-SP or the acknowledgement number allotted by
CRA-FC at the time of submission of application forms by POP-SP. Once the PRAN is generated,
an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of
the subscriber.
What are the documents that need to be submitted for opening a NPS account?
The following documents need to be submitted to the POP for opening of a NPS account:
a. Completely filled in subscriber registration form
b. Proof of Identity
c. Proof of Address
d. Age/date of birth proof.
What are the features of the retirement account provided under NPS?
The following are the most prominent features of the retirement account under NPS:
Every individual subscriber is issued a Permanent Retirement Account Number (PRAN)
card and has a 12 digit unique number. In case of the card being lost or stolen, the same
can be reprinted with additional charges.
Under NPS account, two sub-accounts – Tier I & II are provided. Tier I account is
mandatory and the subscriber has option to opt for Tier II account opening and
operation. The following are the salient features of these sub-accounts:
Tier-I account: This is a non-withdrawable retirement account which can be
withdrawn only upon meeting the exit conditions prescribed under NPS.
Tier-II account: This is a voluntary savings facility available as an add-on to any
Tier-1 account holder. Subscribers will be free to withdraw their savings from
this account whenever they wish.
Will the government also contribute anything to my NPS account?
No. The Government will not be making any contribution to your NPS account. The Government
of India may however, make contributions to the accounts of NPS account holders who opt for
Swavalamban scheme subject to conditions stated in Swavalamban scheme.
In what way is the NPS Portable?
The following are the portability features associated with NPS
NPS account can be operated from anywhere in the country irrespective of individual
employment and location/geography.
Subscribers can shift from one sector to another like Private to Government or vice versa
or Private to Corporate and vice versa. Hence a private citizen can move to Central
Government, State Government etc with the same Account. Also subscriber can shift
within sector like from one POP to another POP and from one POP-SP to another POP-SP.
Likewise an employee who leaves the employment to become a self-employed can
continue with his individual contributions. If he enters re-employment he may continue
to contribute and his employer may also contribute and so on.
The subscriber can contribute to NPS from any of the POP/ POP-SP despite not being
registered with them and from anywhere in India.
Can I have more than one NPS account?
No, multiple NPS accounts for a single individual are not allowed and there is no necessity also
as the NPS is fully portable across sectors and locations.
Are there any minimum annual contribution requirements under NPS? How can I reactivate /
unfreeze the account if frozen due to minimum contribution requirements?
Yes, A subscriber has to contribute a minimum annual contribution of Rs.6000/ - for his Tier I
account in a financial year and if not contributed the account will be frozen. In order to
unfreeze the account, the customer has to pay the total of minimum contribut ions for the
period of freeze, the minimum contribution for the year in which the account is reactivated and
a penalty of Rs.100/ -. In order to unfreeze an account the subscriber has to approach the Point
of Presence (POP) and pay the required amounts. The following table provides the complete
information on the minimum contribution requirements:
For All citizens model Tier I Tier II
Minimum Contribution at the time of account
opening
Rs. 500 Rs. 1000
Minimum amount per contribution Rs. 500 Rs. 250
Minimum total contribution in the year Rs. 6000 Rs. 2000
Minimum frequency of contributions 1 per year 1 per year
How are the funds contributed by the subscribers managed under NPS?
The funds contributed by the Subscribers are invested by the PFRDA registered Pension Fund
Manager (PFM’ ) a per t e inve tment guideline provided by PFRDA. T e inve tment
guidelines are framed in such a manner that there is minimal impact on the subscribers
contributions even if there is a market downturn by a judicious mix of investment instruments
like Government securities, corporate bonds and equities. At present there are 8 Pension Fund
Manager (PFM’ ) w o manage t e ub criber fund at t e option of the subscriber.
At present, Subscriber has option to select any one of the following 8 pension funds:
ICICI Prudential Pension Fund
LIC Pension Fund
Kotak Mahindra Pension Fund
Reliance Capital Pension Fund
SBI Pension Fund
UTI Retirement Solutions Pension Fund LIC Pension Fund
HDFC Pension Management Company
DSP Blackrock Pension Fund Managers
Since registration of PFMs is an ongoing process, this list will be updated from time to time.
What are the different Fund Management Schemes available to the subscriber?
The NPS offers two approaches to invest ub criber’ money:
Active choice – Here the individual would decide on the asset classes in which
the contributed funds are to be invested and their percentages (Asset class E(maximum
of 50%), Asset Class C, and Asset Class G )
Auto choice - Lifecycle Fund- This is the default option under NPS and wherein
the management of investment of funds is done automatically based on the age profile
of the subscriber. For full details, one may go through our website www.pfrda.org.in
wherein the full details of the investment choices and fund management details are
provided.
Can I switch from one investment scheme to another and/ or Pension Fund Manager and if so,
how?
Yes, NPS offers to its subscribers the option to change the scheme preference. Subscriber has
option to realign his investment in asset class E, C and G based on age and future income
requirement. Also, the subscriber has option to change the PFM and the investment option
(active /auto choice).
Is there any default Pension Fund Manager (PFM) Option provided under NPS?
Yes, there is a default PFM provision under NPS and SBI Pension Funds Private Limited acts as
the default Pension Fund Manager.
Can I have a different Pension Fund Manager and Investment Option for my Tier I and Tier II
account?
Yes. You may select different PFMs and Investment Options for your NPS Tier I and Tier II
accounts.
Can I appoint nominees for the NPS Tier I and Tier II Account?
Yes, you need to appoint a nominee at the time of opening of a NPS account in the prescribed
section of the opening form. You can appoint up to 3 nominees for your NPS Tier I and NPS Tier
II account. In such a case you are required to specify the percentage of your saving that you
wish to allocate to each nominee. The share percentage across all nominees should collectively
aggregate to 100%.
I have not made any nomination at the time of registration. Can I nominate subsequently?
What is the process?
If you have not made the nomination to your NPS account at the time of registration, you can do
the same after the allotment of PRAN. You will have to visit your PoP and place Service Request
to update nominations details.
Can I change the Nominees for my NPS Accounts?
Yes. You can change the nominees in your NPS Tier I account at any time after you have received
your PRAN.
Are there any charges for making a nomination?
If you are making the nomination at the time of registering for PRAN, no charges will be levied
to you. However, a subsequent request for nomination updation would be considered as a
service request and you will be charged an amount of Rs. 20/ - plus applicable service tax for
each request.
What income tax reliefs are available to the individuals contributing to NPS?
Tax benefit to employee:
Individuals who are employed and contributing to NPS would enjoy tax benefits on their own
contribution a well a t eir employer’ contribution a under: -
(a) Employee’ own contribution - Eligible for tax deduction up to 10% of Salary (Basic + DA)
under Section 80 CCD(1) within the overall ceiling of Rs. 1 lac under Sec 80 CCE.
(b) Employer’ contribution – The employee is eligible for tax deduction up to 10% of Salary
(Basic + DA) contributed by employer under Sec 80 CCC(2) over and above the limit of Rs. 1 lac
provided under Sec 80 CCE.
Tax benefit for self-employed:
Eligible for tax deduction up to 10 % of gross income under Sec 80 CCD (1) with in the overall
ceiling of Rs. 1 lac under Sec 80 CCE.
What are the applicable provisions for withdrawal of the accumulated pension wealth once I
attain 60 years of age?
At least 40% of the accumulated pension wealth of the subscriber needs to be utilized
for purchase of an annuity providing for the monthly pension of the subscriber and the
balance is paid as a lump sum payment to the subscriber.
What will happen to my savings if I decide to retire or does not want to continue in the NPS
before age 60?
In such an eventuality, at least 80% of the accumulated pension wealth of the subscriber
needs to be utilized for purchase of an annuity providing for the monthly pension of the
subscriber and the balance is paid as a lump sum payment to the subscriber.
In the event of the death of subscriber before attaining the age of 60 years, what will be the
benefit that is payable and who will get the benefits ?
In the unfortunate event of death of the subscriber, the entire accumulated pension
wealth (100%) would be paid to the nominee / legal heir of the subscriber and there
would not be any purchase of annuity/monthly pension.
How to withdraw the benefits available under NPS?
The subscriber wishing to exit from NPS has to submit a withdrawal application form to the
concerned POP along with the documents specified for withdrawal of the benefits and the POP
in turn would authenticate the documents and forwards them to CRA M/s NSDL. CRA in turn
would register your claim and forward you the necessary application form along with the
procedure to be followed and documents that need to be submitted. Once the documents are
received, CRA processes the application and settles the account.
What are the documents that need to be submitted along with the withdrawal forms?
Following documents are required to be submitted along with the withdrawal forms in order to
settle the claims:
1. PRAN card in original
2. Attested copy of Proof of Identity (e. g. Passport, Aadhar Card, PAN Card, Valid Driving
License, Voter ID Card etc.)
3. Attested copy of Proof of Address (e. g. Passport, Aadhar Card, Valid Driving License,
Voter ID Card etc.)
4. Cancelled cheque (containing Subscriber Name, Bank Account Number and IFS Code) or
Bank Certificate Containing Name, Bank Account Number and IFSC code, for direct
credit or electronic transfer.
Note: An illustrative list of documents acceptable as proof of identity and address can be
een at PFRDA circular available on PFRDA’ web ite pfrda.org.in
7 | Pa g e
Can a NPS subscriber defer his lump sum withdrawable amount (up to 60%) under NPS at the
time of exit on 60 years?
Yes, one can defer the withdrawal of the eligible lump sum amount payable under NPS till the
age of 70 years
What will happen to my withdrawal if my PRAN is in frozen or inactive state at the time of
withdrawal?
The withdrawal will be processed like a normal withdrawal but in addition deduct the penalty
that is applicable for unfreezing of such an account without seeking to reactivate the account by
the subscriber or payment of amounts necessary to act ivate the account. In essence, the CRA
will unfreeze the account by charging the penalty applicable and process the withdrawal claim.
What is an annuity?
An annuity is a financial instrument which provides for a regular payment of a certain amount of
money on monthly/quarterly/annual basis for the chosen period for a given purchase price or
pension wealth. In simple terms it is a financial instrument which offers
monthly/quarterly/annual pension at a specified rate for the period you chose.
What are the Annuity Service Providers under NPS and what are their names?
Indian Life Insurance companies which are licensed by Insurance Regulatory and Development
Aut ority (IRDA) are empanelled by PFRDA to act a Annuity Service Provider’ to provide
annuity services to the subscribers of NPS. Currently, the following are the ASPs empanelled by
PFRDA.
1. Life Insurance Corporation of India
2. SBI Life Insurance Co. Ltd.
3. ICICI Prudential Life Insurance Co. Ltd.
4. Bajaj Allianz Life Insurance Co. Ltd.
5. Star Union Dai-ichi Life Insurance Co. Ltd.
6. Reliance Life Insurance Co. Ltd.
7. HDFC Standard Life Insurance Co. Ltd
Note: The ASP empanelment process is an ongoing process and the list of ASPs may grow in
future.
What are the different types of annuities providing for monthly pension available to the
subscribers of NPS?The following are the generic annuities that are offered by Annuity Service Providers to the
s ub criber of NPS. However, ome of t e ASP’ may offer ome variant w ic ave lig tly
different or combination type of annuities.
1. Pension (Annuity) payable for life at a uniform rate to the annuitant only.
2. Pension (Annuity) payable for 5, 10, 15 or 20 years certain and thereafter as long as
you are alive.
3. Pension (Annuity) for life with return of purchase price on death of the annuitant
(Policyholder).
4. Pension (Annuity) payable for life increasing at a simple rate of 3% p.a.
8 | Pa g e
5. Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse
during his/her lifetime on death of the annuitant.
6. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse
during his/her lifetime on death of the annuitant.
7. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse
during his/her lifetime on death of the annuitant and with return of purchase price on
death of the spouse. If the spouse predeceases the annuitant, payment of annuity will
cease after the death of the annuitant and purchase price is paid to the nominee
What are the factors that determine the annuity income when you buy an annuity?
The Size of your pension wealth/corpus determines your monthly annuity/pension that you
receive. Bigger the accumulated pension wealth or corpus used for purchase of annuity, the
bigger would be the monthly pension that is received. Besides that, amount of annuity may vary
according to the type of annuity variant selected by the subscriber.
What is the default annuity scheme and default ASP under NPS?
The following default annuity service provider along with the annuity scheme is available to all
the subscribers under National Pensions System.
1. Default Annuity Service Provider – Life Insurance Corporation of India (LIC)
2. Default Annuity Scheme - Annuity for life with a provision of 100% of the annuity payable to
pou e during i / er life on deat of annuitant’ and under this option, payment of monthly
annuity would cease once the annuitant and the spouse die or after death of the annuitant if the
spouse pre-deceases the annuitant, without any return of purchase price.
However, it may be noted t at default option i being purely provided in t e ub criber ’
interest and to avoid any delay in claim processing and is not with a view to endorse/promote
any particular ASP or annuity variant being offered by the ASP. If the amount available in NPS
account of subscriber is not adequate to buy the default annuity variant and from the default
ASP, the subscriber has to compulsorily choose an ASP who offers an annuity at the available
corpus in the account of the subscriber.
Can I use more than 40% of my accumulated pension wealth to purchase the annuity at the
time of exit from NPS upon attaining the age of 60 years?
Yes, a subscriber at the time of attaining the age of 60 years can purchase annuity up to 100% of
his accumulated pension wealth.
Can a NPS subscriber defer his annuity purchase under NPS at the time of exit on 60 years?
Yes, one can defer the mandatory purchase of annuity for a maximum period of 3 years, at the
time of exit from NPS.
To whom the claim for withdrawal of benefits needs to be submitted?
2. Exit from NPS before the age of 60 years
3. Upon Death of the Subscriber
How the annuity OR monthly pension is paid?
Monthly pension /Annuity will be paid through direct bank transfer to the specified subscribers
account only through Annuity Service Providers.
I have a NPS account and have a grievance on the services provided.To whom shall I report and how?
The subscriber can raise grievance through any of the modes mentioned below:
Yes. Investment in NPS is independent of your contribution to any Provident Fund.
I have invested in pension funds of non-government / private entities. Can I still invest in NPS?
Yes. Investment in NPS is independent of your subscription to any other pension fund.
How and where can I open a NPS account?
NPS is distributed through authorized entities called Point of Pre ence (POP’ ) and almo t all
the banks (both private and public sector) are enrolled to act as Point of Presence (POP) under
NPS apart from several other financial institutions. To invest in NPS, you will be required to
open a NPS account through the Point of Presence (POP) and who will assist the subscriber in
opening the account including the filling up of necessary forms, providing the information about
NPS and any other relevant information in this regard.
Who is a POP/POP-SP and what is their role?
Points of Presence (POPs) are the first points of interaction of the NPS subscriber with the NPS
architecture. The authorized branches of a POP, called Point of Presence Service Providers (POPSPs),
will act as collection points and extend a number of customer services to NPS subscribers
including requests for withdrawal from NPS.
How can we find location/ address of POP-SP nearest to the place where I live for opening a
NPS account?POP-SP location can be accessed through website of PFRDA. This can also be accessed through
below mentioned link of CRA’ web site:
https:/ /www.npscra.nsdl.co.in/pop-sp.php
How will I know about the status of my PRAN application form?
Subscriber can check the status by accessing CRA website: https:/ /cra-nsdl.com/CRA/ by using
the 17 digit receipt number provided by POP-SP or the acknowledgement number allotted by
CRA-FC at the time of submission of application forms by POP-SP. Once the PRAN is generated,
an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of
the subscriber.
What are the documents that need to be submitted for opening a NPS account?
The following documents need to be submitted to the POP for opening of a NPS account:
a. Completely filled in subscriber registration form
b. Proof of Identity
c. Proof of Address
d. Age/date of birth proof.
What are the features of the retirement account provided under NPS?
The following are the most prominent features of the retirement account under NPS:
Every individual subscriber is issued a Permanent Retirement Account Number (PRAN)
card and has a 12 digit unique number. In case of the card being lost or stolen, the same
can be reprinted with additional charges.
Under NPS account, two sub-accounts – Tier I & II are provided. Tier I account is
mandatory and the subscriber has option to opt for Tier II account opening and
operation. The following are the salient features of these sub-accounts:
Tier-I account: This is a non-withdrawable retirement account which can be
withdrawn only upon meeting the exit conditions prescribed under NPS.
Tier-II account: This is a voluntary savings facility available as an add-on to any
Tier-1 account holder. Subscribers will be free to withdraw their savings from
this account whenever they wish.
Will the government also contribute anything to my NPS account?
No. The Government will not be making any contribution to your NPS account. The Government
of India may however, make contributions to the accounts of NPS account holders who opt for
Swavalamban scheme subject to conditions stated in Swavalamban scheme.
In what way is the NPS Portable?
The following are the portability features associated with NPS
NPS account can be operated from anywhere in the country irrespective of individual
employment and location/geography.
Subscribers can shift from one sector to another like Private to Government or vice versa
or Private to Corporate and vice versa. Hence a private citizen can move to Central
Government, State Government etc with the same Account. Also subscriber can shift
within sector like from one POP to another POP and from one POP-SP to another POP-SP.
Likewise an employee who leaves the employment to become a self-employed can
continue with his individual contributions. If he enters re-employment he may continue
to contribute and his employer may also contribute and so on.
The subscriber can contribute to NPS from any of the POP/ POP-SP despite not being
registered with them and from anywhere in India.
Can I have more than one NPS account?
No, multiple NPS accounts for a single individual are not allowed and there is no necessity also
as the NPS is fully portable across sectors and locations.
Are there any minimum annual contribution requirements under NPS? How can I reactivate /
unfreeze the account if frozen due to minimum contribution requirements?
Yes, A subscriber has to contribute a minimum annual contribution of Rs.6000/ - for his Tier I
account in a financial year and if not contributed the account will be frozen. In order to
unfreeze the account, the customer has to pay the total of minimum contribut ions for the
period of freeze, the minimum contribution for the year in which the account is reactivated and
a penalty of Rs.100/ -. In order to unfreeze an account the subscriber has to approach the Point
of Presence (POP) and pay the required amounts. The following table provides the complete
information on the minimum contribution requirements:
For All citizens model Tier I Tier II
Minimum Contribution at the time of account
opening
Rs. 500 Rs. 1000
Minimum amount per contribution Rs. 500 Rs. 250
Minimum total contribution in the year Rs. 6000 Rs. 2000
Minimum frequency of contributions 1 per year 1 per year
How are the funds contributed by the subscribers managed under NPS?
The funds contributed by the Subscribers are invested by the PFRDA registered Pension Fund
Manager (PFM’ ) a per t e inve tment guideline provided by PFRDA. T e inve tment
guidelines are framed in such a manner that there is minimal impact on the subscribers
contributions even if there is a market downturn by a judicious mix of investment instruments
like Government securities, corporate bonds and equities. At present there are 8 Pension Fund
Manager (PFM’ ) w o manage t e ub criber fund at t e option of the subscriber.
At present, Subscriber has option to select any one of the following 8 pension funds:
ICICI Prudential Pension Fund
LIC Pension Fund
Kotak Mahindra Pension Fund
Reliance Capital Pension Fund
SBI Pension Fund
UTI Retirement Solutions Pension Fund LIC Pension Fund
HDFC Pension Management Company
DSP Blackrock Pension Fund Managers
Since registration of PFMs is an ongoing process, this list will be updated from time to time.
What are the different Fund Management Schemes available to the subscriber?
The NPS offers two approaches to invest ub criber’ money:
Active choice – Here the individual would decide on the asset classes in which
the contributed funds are to be invested and their percentages (Asset class E(maximum
of 50%), Asset Class C, and Asset Class G )
Auto choice - Lifecycle Fund- This is the default option under NPS and wherein
the management of investment of funds is done automatically based on the age profile
of the subscriber. For full details, one may go through our website www.pfrda.org.in
wherein the full details of the investment choices and fund management details are
provided.
Can I switch from one investment scheme to another and/ or Pension Fund Manager and if so,
how?
Yes, NPS offers to its subscribers the option to change the scheme preference. Subscriber has
option to realign his investment in asset class E, C and G based on age and future income
requirement. Also, the subscriber has option to change the PFM and the investment option
(active /auto choice).
Is there any default Pension Fund Manager (PFM) Option provided under NPS?
Yes, there is a default PFM provision under NPS and SBI Pension Funds Private Limited acts as
the default Pension Fund Manager.
Can I have a different Pension Fund Manager and Investment Option for my Tier I and Tier II
account?
Yes. You may select different PFMs and Investment Options for your NPS Tier I and Tier II
accounts.
Can I appoint nominees for the NPS Tier I and Tier II Account?
Yes, you need to appoint a nominee at the time of opening of a NPS account in the prescribed
section of the opening form. You can appoint up to 3 nominees for your NPS Tier I and NPS Tier
II account. In such a case you are required to specify the percentage of your saving that you
wish to allocate to each nominee. The share percentage across all nominees should collectively
aggregate to 100%.
I have not made any nomination at the time of registration. Can I nominate subsequently?
What is the process?
If you have not made the nomination to your NPS account at the time of registration, you can do
the same after the allotment of PRAN. You will have to visit your PoP and place Service Request
to update nominations details.
Can I change the Nominees for my NPS Accounts?
Yes. You can change the nominees in your NPS Tier I account at any time after you have received
your PRAN.
Are there any charges for making a nomination?
If you are making the nomination at the time of registering for PRAN, no charges will be levied
to you. However, a subsequent request for nomination updation would be considered as a
service request and you will be charged an amount of Rs. 20/ - plus applicable service tax for
each request.
What income tax reliefs are available to the individuals contributing to NPS?
Tax benefit to employee:
Individuals who are employed and contributing to NPS would enjoy tax benefits on their own
contribution a well a t eir employer’ contribution a under: -
(a) Employee’ own contribution - Eligible for tax deduction up to 10% of Salary (Basic + DA)
under Section 80 CCD(1) within the overall ceiling of Rs. 1 lac under Sec 80 CCE.
(b) Employer’ contribution – The employee is eligible for tax deduction up to 10% of Salary
(Basic + DA) contributed by employer under Sec 80 CCC(2) over and above the limit of Rs. 1 lac
provided under Sec 80 CCE.
Tax benefit for self-employed:
Eligible for tax deduction up to 10 % of gross income under Sec 80 CCD (1) with in the overall
ceiling of Rs. 1 lac under Sec 80 CCE.
What are the applicable provisions for withdrawal of the accumulated pension wealth once I
attain 60 years of age?
At least 40% of the accumulated pension wealth of the subscriber needs to be utilized
for purchase of an annuity providing for the monthly pension of the subscriber and the
balance is paid as a lump sum payment to the subscriber.
What will happen to my savings if I decide to retire or does not want to continue in the NPS
before age 60?
In such an eventuality, at least 80% of the accumulated pension wealth of the subscriber
needs to be utilized for purchase of an annuity providing for the monthly pension of the
subscriber and the balance is paid as a lump sum payment to the subscriber.
In the event of the death of subscriber before attaining the age of 60 years, what will be the
benefit that is payable and who will get the benefits ?
In the unfortunate event of death of the subscriber, the entire accumulated pension
wealth (100%) would be paid to the nominee / legal heir of the subscriber and there
would not be any purchase of annuity/monthly pension.
How to withdraw the benefits available under NPS?
The subscriber wishing to exit from NPS has to submit a withdrawal application form to the
concerned POP along with the documents specified for withdrawal of the benefits and the POP
in turn would authenticate the documents and forwards them to CRA M/s NSDL. CRA in turn
would register your claim and forward you the necessary application form along with the
procedure to be followed and documents that need to be submitted. Once the documents are
received, CRA processes the application and settles the account.
What are the documents that need to be submitted along with the withdrawal forms?
Following documents are required to be submitted along with the withdrawal forms in order to
settle the claims:
1. PRAN card in original
2. Attested copy of Proof of Identity (e. g. Passport, Aadhar Card, PAN Card, Valid Driving
License, Voter ID Card etc.)
3. Attested copy of Proof of Address (e. g. Passport, Aadhar Card, Valid Driving License,
Voter ID Card etc.)
4. Cancelled cheque (containing Subscriber Name, Bank Account Number and IFS Code) or
Bank Certificate Containing Name, Bank Account Number and IFSC code, for direct
credit or electronic transfer.
Note: An illustrative list of documents acceptable as proof of identity and address can be
een at PFRDA circular available on PFRDA’ web ite pfrda.org.in
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Can a NPS subscriber defer his lump sum withdrawable amount (up to 60%) under NPS at the
time of exit on 60 years?
Yes, one can defer the withdrawal of the eligible lump sum amount payable under NPS till the
age of 70 years
What will happen to my withdrawal if my PRAN is in frozen or inactive state at the time of
withdrawal?
The withdrawal will be processed like a normal withdrawal but in addition deduct the penalty
that is applicable for unfreezing of such an account without seeking to reactivate the account by
the subscriber or payment of amounts necessary to act ivate the account. In essence, the CRA
will unfreeze the account by charging the penalty applicable and process the withdrawal claim.
What is an annuity?
An annuity is a financial instrument which provides for a regular payment of a certain amount of
money on monthly/quarterly/annual basis for the chosen period for a given purchase price or
pension wealth. In simple terms it is a financial instrument which offers
monthly/quarterly/annual pension at a specified rate for the period you chose.
What are the Annuity Service Providers under NPS and what are their names?
Indian Life Insurance companies which are licensed by Insurance Regulatory and Development
Aut ority (IRDA) are empanelled by PFRDA to act a Annuity Service Provider’ to provide
annuity services to the subscribers of NPS. Currently, the following are the ASPs empanelled by
PFRDA.
1. Life Insurance Corporation of India
2. SBI Life Insurance Co. Ltd.
3. ICICI Prudential Life Insurance Co. Ltd.
4. Bajaj Allianz Life Insurance Co. Ltd.
5. Star Union Dai-ichi Life Insurance Co. Ltd.
6. Reliance Life Insurance Co. Ltd.
7. HDFC Standard Life Insurance Co. Ltd
Note: The ASP empanelment process is an ongoing process and the list of ASPs may grow in
future.
What are the different types of annuities providing for monthly pension available to the
subscribers of NPS?The following are the generic annuities that are offered by Annuity Service Providers to the
s ub criber of NPS. However, ome of t e ASP’ may offer ome variant w ic ave lig tly
different or combination type of annuities.
1. Pension (Annuity) payable for life at a uniform rate to the annuitant only.
2. Pension (Annuity) payable for 5, 10, 15 or 20 years certain and thereafter as long as
you are alive.
3. Pension (Annuity) for life with return of purchase price on death of the annuitant
(Policyholder).
4. Pension (Annuity) payable for life increasing at a simple rate of 3% p.a.
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5. Pension (Annuity) for life with a provision of 50% of the annuity payable to spouse
during his/her lifetime on death of the annuitant.
6. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse
during his/her lifetime on death of the annuitant.
7. Pension (Annuity) for life with a provision of 100% of the annuity payable to spouse
during his/her lifetime on death of the annuitant and with return of purchase price on
death of the spouse. If the spouse predeceases the annuitant, payment of annuity will
cease after the death of the annuitant and purchase price is paid to the nominee
What are the factors that determine the annuity income when you buy an annuity?
The Size of your pension wealth/corpus determines your monthly annuity/pension that you
receive. Bigger the accumulated pension wealth or corpus used for purchase of annuity, the
bigger would be the monthly pension that is received. Besides that, amount of annuity may vary
according to the type of annuity variant selected by the subscriber.
What is the default annuity scheme and default ASP under NPS?
The following default annuity service provider along with the annuity scheme is available to all
the subscribers under National Pensions System.
1. Default Annuity Service Provider – Life Insurance Corporation of India (LIC)
2. Default Annuity Scheme - Annuity for life with a provision of 100% of the annuity payable to
pou e during i / er life on deat of annuitant’ and under this option, payment of monthly
annuity would cease once the annuitant and the spouse die or after death of the annuitant if the
spouse pre-deceases the annuitant, without any return of purchase price.
However, it may be noted t at default option i being purely provided in t e ub criber ’
interest and to avoid any delay in claim processing and is not with a view to endorse/promote
any particular ASP or annuity variant being offered by the ASP. If the amount available in NPS
account of subscriber is not adequate to buy the default annuity variant and from the default
ASP, the subscriber has to compulsorily choose an ASP who offers an annuity at the available
corpus in the account of the subscriber.
Can I use more than 40% of my accumulated pension wealth to purchase the annuity at the
time of exit from NPS upon attaining the age of 60 years?
Yes, a subscriber at the time of attaining the age of 60 years can purchase annuity up to 100% of
his accumulated pension wealth.
Can a NPS subscriber defer his annuity purchase under NPS at the time of exit on 60 years?
Yes, one can defer the mandatory purchase of annuity for a maximum period of 3 years, at the
time of exit from NPS.
To whom the claim for withdrawal of benefits needs to be submitted?
- The All citizen model sector including corporate and NPS Lite-Swavalamban subscribers have the option of submitting their request to the nearest PFRDA registered POP/POPSP/AGGREGATOR.
- The subscriber needs to submit specified application form along with the full set of documentation as prescribed.
- The Exit rules applicable for All citizen model sector subscribers are
2. Exit from NPS before the age of 60 years
3. Upon Death of the Subscriber
Monthly pension /Annuity will be paid through direct bank transfer to the specified subscribers
account only through Annuity Service Providers.
I have a NPS account and have a grievance on the services provided.To whom shall I report and how?
The subscriber can raise grievance through any of the modes mentioned below:
- Call Centre/ Interactive Voice Response System (IVR)
- The Subscriber can contact the CRA call center at toll free telephone number 1-800-222080 and register the grievance by using T-PIN.
- Dedicated Call center executives.
- Physical forms direct to CRA
- The Subscriber may submit the grievance in a prescribed format to the POP – SP who would forward it to CRA Central Grievance Management System (CGMS).
- Subscriber can directly send form to CRA.
- Web based interface
- The Subscriber may register the grievance at the website www.npscra.nsdl.co.in with the use of the I-pin allotted at the time of opening a Permanent Retirement Account.
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