Skip to main content

How does National Pension Scheme India work?

According to the United Nations Population Division, World's life expectancy is expected to reach 75 years by 2050 from the present level of 65 years. The better health and sanitation conditions in India have increased the lifespan. As a result, the number of post-retirement years has increased.

Retirement planning has become an essential part of one's life owing to the increased life expectancy and cost of living. The Government of India started the National Pension System under the Pension Fund Regulatory and Development Authority (PFRDA) to take the citizens under the affordable social security scheme. NPS is a low cost, tax efficient, flexible and portable Scheme. Employees and employers both contribute to the scheme. The wealth generated from the scheme depends on the investment growth derived from the contributions made. Consequently, the greater the value of contributions, the greater the investment achieved.

There are three types of accounts under the National Pension Scheme:

Tier 1- A non-withdrawable retirement account which can be withdrawn upon meeting the exit conditions prescribed under NPS. A subscriber has to contribute a minimum of Rs 6000 in a financial year for a Tier 1 account to refrain the account being frozen.

Tier 2- A subscriber can deposit as well as withdraw from this account as per the convenience. However, it is an add-on to the Tier 1 account. One must have a Tier 1 account in order to have a Tier 2 account. The minimum contribution required in Tier II is Rs 2000 in a financial year.

Swavalamban Account- The Indian Government contributes a sum of Rs 1000 every year over the initial four years.

An individual is required to appoint a nominee at the time of opening NPS account. One can appoint up to 3 nominees for NPS Tier 1 and Tier 2 account. You are allowed to change the nominees in the NPS account after obtaining the PRAN. Permanent Retirement Account Number is a twelve digit unique number.


Who can join the scheme?

Any citizen of India, resident or non-resident is allowed to join the scheme. Individuals aged between 18-60 years are allowed to participate in the scheme. Citizens can join the scheme as individuals and employer-employee groups after the KYC procedure. A Non-resident Indian can open an NPS account. The contributions made by NRI are subject to regularised by RBI and FEMA. Also, one can invest in NPS despite their contribution to the provident fund.

How and where can you open an NPS account?

NPS is distributed through the authorized entities called Point of Presence(POP's). Almost all banks and select financial institutions act as the point of presence to enter into the NPS architecture. These POP assists the subscriber open an account and fill up the necessary forms. The location of these POPs can be accessed through the website of PFRDA. Multiple NPS accounts are not allowed for a single individual.


What are the documents required to be submitted for opening an NPS account?

The following documents are required to be submitted for opening of an NPS account

Proof of Identity

Proof of Address

Proof of date of birth

Subscriber registration form

How is the NPS scheme portable?

The account of NPS can be operated from anywhere in the country. If you take an employment from private sector to public or if you take an employment under the central government or state government, the account will be the same. A subscriber can shift from one POP to another POP. Moreover, if an individual becomes self-employed after leaving the employment, the account will be the same.


How are the funds contributed managed under NPS?

There are 8 pension fund managers managing the funds at the option of the subscriber.

ICICI Prudential Pension Fund

LIC Pension Fund

Kotak Mahindra Pension Fund

Reliance Capital pension Fund

SBI pension Fund

UTI Retirement solutions Pension fund

HDFC pension management company

DSP Blackrock Pension Fund managers



SIPs are Best Investments as Stock Market s are move up and down. Volatile is your best friend in making Money and creating enormous Wealth, If you have patience and long term Investing orientation. Invest in Best SIP Mutual Funds and get good returns over a period of time. Know which are the Top SIP Funds to Invest Save Tax Get Rich - Best ELSS Funds

For more information on Top SIP Mutual Funds contact Save Tax Get Rich on 94 8300 8300

OR

You can write to us at

Invest [at] SaveTaxGetRich [dot] Com

Popular posts from this blog

Post Office Deposits Interest Rates

Best SIP Funds to Invest Online   SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact  Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com

Tax Slabs 2012

Slab 1 Upto Rs 1.6 Lacs Tax Rate NIL for Men; Upto Rs 1.9 Lacs Tax Rate NIL for Women; Upto Rs 2.4 Lacs Tax Rate NIL for Senior Citizen; Slab 2 Rs 1.6 Lacs to Rs 5 Lacs Tax Rate 10% Slab 3 Rs 5 Lacs to Rs 8 Lacs Tax Rate 20% Slab 4 Rs 8 Lacs onwards Tax Rate 30%   --------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.   Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)   Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications   These Application Forms can be used for buying regular mutual funds also   Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds ) HDFC TaxSaver ICICI Prudential Tax Plan DSP BlackRock Tax Saver Fund Birla Sun Life Tax Relief '96 R

How Tax Deducted at Source (TDS) works?

    THE tax season is here. And if you are an employee you can't blame your employer for deducting large chunks of money from your salary towards tax deducted at source ( TDS ), which he is legally obliged to do. Your bank will also deduct some percentage from your FD interest of Rs 10,000 or more towards TDS! So what is this TDS all about? How is it computed? Are there any changes this year? Read on... What is TDS? TDS reduces your taxable income and could even provide tax relief! The TDS collections account for 40 percent of the total taxes collected in the country. As the name suggests TDS is the amount of tax that is deducted at source in certain types of income . The TDS thus collected is deposited in the Government treasury within a specified time. How is it computed? Some of the types of income where TDS is applicable include salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and UTI/Mutual Funds, commission and brokerage

Modern day balanced mutual fund approach

Buy Gold Mutual Funds Invest Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Call 0 94 8300 8300 (India)   In reality, most balanced funds have a strong tilt towards equity instead of a mix of equity and debt THERE are various types of mutual funds available to investors with specific features. Often investors have a particular idea about a specific type of funds in terms of their features and risks, but that is not what is actually available. Therefore, it is necessary for an investor to understand the actual position before picking up a fund. This requires some work on the part of the investor. One example can be the situation with balanced funds. Name is not representative: One of the first things that an investor has to understand is that the name of the fund is often not representative of its investment pattern. The name often represents only the aim of the fund, and not what it actually is.

Investment Strategy for Low Risk Investors

    Invest in Best Debt Funds Online   These financial strategies can help optimise the returns from safe investments   There are many reasons why investors prefer to be safe than sorry. Some of them can't stom ach the volatility that comes with stock investments. Others may have had a bad experience, which is why they want to stay away . The risk profile of an individual is determined by a combination of factors (see chart). Based on the factors that determine risk appetite, we have developed a risk tolerance test (see below). If your score puts you in the low-risk segment, here are some tips for you to optimise your returns. GO FOR TAX EFFICIENT INVESTMENTS Bank deposits are all-time favourites of those seeking low-risk instruments.They are easy to understand, widely available and anyone with a bank account can open one. Thanks to Netbanking, they also do not require paperwork. But bank deposits are tax inefficient because the interest earned is added to your income and taxed
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now