NPS Scheme Benefits – Today my team is posting about NPS related queries and benefits of NPS. And if you have and other query related to NPS then post your query and definitely my team will reply soon.
The scheme has been launched by the Pension Fund Regulatory and Development Authority (PFRDA) to promote old age security to all citizens of India including workers in the unorganized sector. NPS is a voluntary, defined contribution retirement savings scheme and is administered / regulated by PFRDA.
What is NPS scheme and benefits?
The New Pension Scheme (NPS) has been launched by the Government of India for all citizens, it is administered by the Pension Fund Regulatory and Development Authority (PFRDA) as the regulator of our pension funds. Secures old age income in the form of pension, once the subscriber(s) completes 60 years of age.
What does NPS mean?
New Pension Scheme: In the year 2004, the Central Government abolished the old pension scheme and started the National Pension System instead. Employees who joined government service after January 2004 are given pension after retirement under the New Pension Scheme (NPS).
How to withdraw money from NPS?
NPS rules for premature withdrawal
The money can be withdrawn before the maturity of NPS Tier 1 only after completion of three years from the date of account opening. This is called “premature withdrawal”. In this you can withdraw only 20% of the deposited fund. The remaining 80% will be used to buy annuity (monthly pension plan).
Who can take NPS?
Any citizen of India (both resident and non-resident) who is in the age group of 18 to 65 years (as on the date of submission of NPS application) can join NPS.
What happens to NPS if I leave my job?
If the contribution is stopped and the subscriber wants to exit from NPS before attaining the age of 60 years, he can withdraw up to 20% of the amount accumulated till that time. Subscriber will have to purchase annuity from the empanelled Annuity Service Providers of PFRDA with the balance amount.
Can we close NPS account?
If you do not want to continue with your NPS account or want to defer your withdrawal, you can exit from NPS at any time. Login to CRA system (www.cra-nsdl.com) using your User ID (PRAN) and Password. Enter the required details including choice of Annuity Service Provider (ASP) and Annuity Plan that will provide you pension.
For how many years to invest in NPS?
The maturity period of NPS is 60 years. You should contribute to your NPS account till you are 60 years old. However, you can withdraw a certain percentage of your contribution partially or prematurely before attaining the age of 60 years.
Can I withdraw money from NPS after 5 years?
In case of premature exit- If the total accumulated corpus is less than or equal to Rs. 2.5 lakh, the subscriber can avail the option of complete withdrawal. However, you can exit NPS only after completion of 5 years.
What happens to the annuity after death in NPS?
Know what the rule says
According to the PFRDA (Exit and Withdrawal under NPS) regulation, 100% of the NPS corpus is paid to the nominee if the account holder dies. If the nominee is interested in taking pension, then he is also given the option of buying an annuity for it.
Can I get NPS pension before 60?
The National Pension System (NPS) is a voluntary defined pension scheme for Indian citizens between the ages of 18 and 70, subject to certain conditions. Like Public Provident Fund (PPF), NPS offers savings and tax benefits. A subscriber who turns 60 years or more can withdraw his NPS corpus in lump sum or in the form of annuity.
How many pension plans can I have?
Yes, you can buy more than one pension plan for yourself. There is no restriction on the number of pension plans you can buy. However, you can claim a deduction under Section 80CCC* of the Income Tax Act, 1961 against the premium paid for the plan only up to ₹ 1.5 lakh per annum.
Can I invest in NPS for 10 years?
The NPS scheme allows premature exit after 10 years of investment in the scheme, if you invest 80% of the accumulated corpus for purchase of annuity. Further, one can exit the scheme only on retirement or death.
