Retirement Planning Made Simple with NPS

Minimum contribution at the time of account opening and for all subsequent transactions – Rs. 500
· Minimum contribution per year - Rs 1,000 excluding any charges and taxes
· Minimum number of contributions in a year - 01

If the subscriber contributes less than Rs. 1000 in a year, his/her account would be frozen and further transactions will be allowed only after the account is reactivated
· In order to reactivate the account, the subscriber would have to pay the minimum contributions.

Minimum number of contributions in a year -01
· Minimum contribution at the time of account opening – Rs. 1000/- and for all subsequent transactions a minimum amount per contribution of Rs. 250/-

Under NPS, the manner in which your money is invested will depend upon subscriber’s own choice. NPS offers a number of funds and multiple investment options to choose from. In case subscriber does not want to exercise a choice, his/her money will be invested as per the "Auto Choice" option, where money will get invested in various type of schemes as per subscriber’s age. The NPS offers two approaches to invest subscriber’s money:
· Active choice – Individual Funds (Asset Class E, Asset Class C , Asset Class G & Asset Class A)
Subscriber will have the option to actively decide as to how his/her NPS pension wealth is to be invested in the following three options:
Asset Class E - Investments in predominantly equity market instruments.
Asset Class C- investments in fixed income instruments other than Government securities.
Asset Class G - investments in Government securities.
Asset Class A (Maximum allocation up to 5% of investment). Note: Investment in Asset Class A is available only for NPS Tier 1 account. - Investment in Commercial or Residential mortgage based securities, Units issued by Real Estate and/or Infrastructure Investment Trusts and/or Asset backed securities as regulated by SEBI, Alternative investment funds (AIF category I & II) registered with SEBI
Subscriber can choose to invest his/her entire pension wealth in C or G asset classes and up to a maximum of 75% in equity (Asset class E). Subscriber can also distribute his/her pension wealth across E, C and G asset classes, subject to such conditions as may be prescribed by Pension Fund Regulatory and Development Authority (“PFRDA”)
· Auto Choice – Lifecycle Fund
NPS offers an easy option for those participants who do not have the required knowledge to manage their NPS investments. In case subscribers are unable/unwilling to exercise any choice as regards asset allocation, their funds will be invested in accordance with the Auto Choice option. In this option, the investments will be made in a life-cycle fund. Here, the fraction of funds invested across three asset classes will be determined by a pre-defined portfolio.

Tax Benefit available to Individual:
Any individual who is Subscriber of NPS can claim tax deduction up to 10% of gross income under Sec 80 CCD (1) with in the overall ceiling of Rs. 1.5 lac under Sec 80 CCE.
Exclusive Tax Benefit to all NPS Subscribers u/s 80CCD (1B)
An additional deduction for investment up to Rs. 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs. 1.5 lakh available under section 80C of Income Tax Act. 1961.
Tax Benefits under the Corporate Sector:
a. Corporate Subscriber:
Additional Tax Benefit is available to Subscribers under Corporate Sector, u/s 80CCD (2) of Income Tax Act. Employer's NPS contribution (for the benefit of employee) up to 10% of salary (Basic + DA), is deductible from taxable income, without any monetary limit.
b. Corporates
Employer’s Contribution towards NPS up to 10% of salary (Basic + DA) can be deducted as ‘Business Expense’ from their Profit & Loss Account

A. Upon attainment of the age of 60/65 years:
At least 40% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of annuity providing for monthly pension to the subscriber and balance is paid as lump sum payment to the subscriber. However, the subscriber has the option to defer the lump sum withdrawal till the age of 70 years.
In case of attainment of 60 years, exit before the age of Superannuation/attainment of 60 years, the subscribers can also initiate withdrawal requests in the CRA system which shall subsequently have to be verified by the Nodal Office (POP/Banks) in CRA system. www.cra-nsdl.com
B. At any time before attaining the age of 60/65 years:
At least 80% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of annuity providing for monthly pension to the subscriber and the balance is paid as a lump sum payment to the subscriber.
C. 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.