What are the Norms for National Pension Scheme? (Important) (Download PDF)

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National Pension Scheme is contributory pension system. NPS is mandatory for all Central Govt. employees. GoI has currently made 3 changes in NPS including withdrawal norms. The Pension Fund Regulatory Development Authority (PFRDA) relaxed the norms for partial withdrawal under the National Pension Scheme (NPS).

Image of National Pension Scheme (NPS)

Image of National Pension Scheme (NPS)

Image of National Pension Scheme (NPS)

Partial Withdrawal During Service

  • PFRDA has liberalized norms for partial withdrawals w/objective to meet subscriber’s sudden financial requirement enrolled under NPS.

  • Suitable amendments were made thru “Pension Fund Regulatory & Development Authority Regulations”, 2017.

Increase in the Joining Age under NPS:

  • Norms is w/objective to allow individuals who are in age bracket b/w 60 years & 65 years to join NPS system.

  • Suitable amendments were made thru “Pension Fund Regulatory & Development Authority Regulations”, 2017.

Exit in Case of Disability & Incapacitation of Subscriber:

  • Norms are w/objective of facilitating easy exit & withdrawal in case of disability & incapacitation of subscriber covered under NPS.

  • Suitable amendments thru “Pension Fund Regulatory & Development Authority Regulations”, 2017.

Benefits of NPS

Dual Benefit of Low Cost & Power of Compounding

  • Account maintenance costs under NPS are lowest.

  • Saving for long-term goal, cost matters a lot.

  • Above 35 - 40 years, charges can shave off significant amount from corpus.

  • Till retirement pension wealth accumulation grows over period of time w/compounding effect.

Flexible Investment Option

  • Subscriber have control on choice of investment made & Pension funds.

  • Subscriber can switch from one Pension fund to another.

Tax Benefit to Employee

  • Employee’s own contribution: Eligible for tax deduction up to 10 % of Salary within overall ceiling of Rs. 1.50 lacs.

  • Employer’s contribution: Eligible for tax deduction up to 10 % of Salary contributed by employer.

Tax Benefit for Self-Employed

  • Eligible for tax deduction up to 20 % of gross income.

  • Subscriber is allowed deduction in addition to deduction allowed for contribution in his NPS account subject.

What is PFRDA?

  • Pension Fund Regulatory & Development Authority was established on August, 2003.

  • PFRDA is quasi govt. organization having executive, legislative, judicial powers.

  • It promotes old age income security by regulating pension funds & protects interests of subscribers to schemes of pension funds & related matters.

- Published/Last Modified on: June 1, 2018

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