Some of the benefits of the National Pension System (NPS) are:
It is transferrable - each employee is identified by a specific number and has a separate PRAN that is transferrable, meaning it remains the same even if the employee is transferred to another office.
It is regulated - NPS is regulated with transparent investment standards by PFRDA - External website that opens in a new window and NPS Trust - External website that opens in a new window with regular monitoring and performance review of the fund manager is.
Tax benefit
At present there is an exemption in tax treatment for contributions made to Tier 1 account - Exempted Tax (EET) ie the entire subscription amount is eligible for deduction from the gross total income up to a limit of Rs 1.00 lakh (along with other specified investments) Section As per 80C (as per the provisions of Income Tax Act 1961, which are amended from time to time).
The amount used by the subscriber to purchase the annuity and the value increase on the subscription is not eligible. Only the amount withdrawn by a subscriber after the age of sixty is taxable.
It is transferrable - each employee is identified by a specific number and has a separate PRAN that is transferrable, meaning it remains the same even if the employee is transferred to another office.
It is regulated - NPS is regulated with transparent investment standards by PFRDA - External website that opens in a new window and NPS Trust - External website that opens in a new window with regular monitoring and performance review of the fund manager is.
Tax benefit
At present there is an exemption in tax treatment for contributions made to Tier 1 account - Exempted Tax (EET) ie the entire subscription amount is eligible for deduction from the gross total income up to a limit of Rs 1.00 lakh (along with other specified investments) Section As per 80C (as per the provisions of Income Tax Act 1961, which are amended from time to time).
The amount used by the subscriber to purchase the annuity and the value increase on the subscription is not eligible. Only the amount withdrawn by a subscriber after the age of sixty is taxable.
charge
The annual PRA maintenance charges along with all the charges associated with Tier 1 account are paid by the employer. In case of Tier 2 account, activation charges and transaction charges are paid by the subscriber.
POP charges and CRA charges are given in the following table:
Secondary Charge Head Service Charge * Method of Deduction
CRA PRA Initial Charge Rs. 50 Through collection of units at the end of every quarter
Annual PRA maintenance cost is Rs. 190 per account.
The annual PRA maintenance charges along with all the charges associated with Tier 1 account are paid by the employer. In case of Tier 2 account, activation charges and transaction charges are paid by the subscriber.
POP charges and CRA charges are given in the following table:
Secondary Charge Head Service Charge * Method of Deduction
CRA PRA Initial Charge Rs. 50 Through collection of units at the end of every quarter
Annual PRA maintenance cost is Rs. 190 per account.
Initial Subscription Upload 0.25 Subscription of Initial Subscription of Subscriber Minimum Rs. 20 25,000 to a maximum of Rs. in between
Any further transactions including subscription uploads NPS subscriber's initial subscription of 0.25% minimum Rs. 25,000 to a maximum of Rs. in between
Any other transaction not involving subscription from subscriber Rs. 20
Any further transactions including subscription uploads NPS subscriber's initial subscription of 0.25% minimum Rs. 25,000 to a maximum of Rs. in between
Any other transaction not involving subscription from subscriber Rs. 20
