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National Pension Scheme

NPS is a voluntary contributory pension scheme introduced by the Central Government through Pension Fund Regulatory and Development Authority (PFRDA) to promote old age income security. NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account.

 

How NPS works?

  • Under NPS, individual contributes to his retirement account for his social security and financial independence.
  • FNPS investment made by individual is pooled in pension fund.
  • These fund are invested by PFRDA regulated pension fund managers in diversified portfolio comprising of equity, corporate bonds, and government securities.
  • These investments would grow and accumulate over years, depending on returns generated and time horizon of investment.
  • At the time of normal exit from NPS, subscriber may use at least 40% of accumulated retirement wealth to purchase annuity from PFRDA empanelled annuity service providers and withdraw remaining accumulated wealth as lump sum amount.

Key Benefits

  • Save Retirement Wealth Step by step
  • Flexible Investment Options, not just Market-Based Returns
  • More Cost effective. More Tax Benefits
  • Transparent & Reliable. Backed by Government of India
  • Maximum Retirement Corpus. Lump Sum withdrawal option
  • Permanent Retirement Account Number (PRAN) for easy online access

BENEFITS OF INVESTING IN NPS THROUGH

ICICI-logo
  • Online: Subscribe and invest online in NPS through ICICIdirect.com
  • Ease: Ease to invest in NPS as per your Convenience
  • Flexibility: Option to invest in NPS either through Systematic Investment Plan (SIP) or Lump Sum amount. View Contribution Book, Statement of transaction, NAV of Pension fund n ICICIdirect.com
  • Responsive: Dedicated email ID npshelpdesk@icicisecurities.com to address customer’s NPS queries

NPS TAX BENEFITS

The Union budget 2015-16 has made National Pension System (NPS) more attractive by announcing an exclusive deduction of Rs. 50,000 for under section 80CCD (1B) over and above the limit of Rs. 1,50,000 currently available under section 80C of the Income Tax Act. What’s more! 40% of lump sum withdrawal on attainment of 60 years of age is tax-exempt as announced in Union budget 2016-17.

SectionParticularsMax. deduction under relevant sectionMar, 2021Cumulative maximum deduction u/s 80CCETax Treatment under NPS
80C Deduction towards various contribution or payments (like Life insurance Premium, annuity, PF, subscription to equity shares or debentures, NSC, ULIP, Fixed Deposits, Mutual Funds, Housing Loan Repayment etc) Rs. 150,000 Rs. 150,000 40% of accumulated wealth withdrawn as lump sum from NPS Tier 1 account on attaining 60 yrs of age is tax-exempt
80CCC Deductions towards Pension Fund Rs. 150,000  Rs. 150,000 Minimum 40% of accumulated wealth to be invested in annuity. Investment in Annuity is tax-exempt
80CCD(1) Contribution towards NPS (Tier 1 account) Employed: 10% of Basic Salary Self-employed person : 20% of Gross total income - Pension received through investment is Annuity is considered as income for that FY and shall be taxed basis prevailing tax laws
80CCD(1B) Contribution by any individual to NPS (Tier 1 account) Rs. 50,000 Not Applicable  
80CCD(2) Employer's contribution towards NPS (Tier 1 account) 10% of Basic Salary Not Applicable  

Partial withdrawal (not exceeding 25% of own contribution of subscriber who has been in NPS for at least 3 yrs) made in accordance with the terms and conditions specified under Pension Fund Regulatory and Development Authority Act and regulations is tax-exempt

NPS Return

Pension Fund Managers Inception Date Tier I Tier II
Scheme (A) Scheme (C) Scheme (E) Scheme (G) Scheme (A) Scheme (C) Scheme (E) Scheme (G)
SBI Pension Fund Funds Private Limited 07-Jul-2010 11.1200 9.6500 4.6800 10.5600 0.0000 9.2800 4.7300 10.3600
UTI Retirement Solutions Limited 07-Jul-2010 11.1200 9.6500 4.6800 10.5600 0.0000 9.2800 4.7300 10.3600
LIC Pension Fund Ltd 07-Jul-2010 11.1200 9.6500 4.6800 10.5600 0.0000 9.2800 4.7300 10.3600
Kotak Mahindra Pension Fund Limited 07-Jul-2010 11.1200 9.6500 4.6800 10.5600 0.0000 9.2800 4.7300 10.3600
ICICI Prudential Pension Funds Management Company Limited 07-Jul-2010 11.1200 9.6500 4.6800 10.5600 0.0000 9.2800 4.7300 10.3600
HDFC Pension Management Company Limited 29-Oct-2013 11.1200 9.6500 4.6800 10.5600 0.0000 9.2800 4.7300 10.3600
Birla Sun Life Pension Management Limited 30-Nov-2017 11.1200 9.6500 4.6800 10.5600 0.0000 9.2800 4.7300 10.3600

Calculator

18,98,372
6,00,000
12,98,372
1,80,000

Amt Withdrawn

8,98,372

Pension Amt invested

10,22,814

Pension/M After retire

5,520