Authorised Pension Advisor

National Pension System

The National Pension System (NPS) is a voluntary, long-term retirement savings scheme launched by the Government of India in 2004. NPS aims to provide retirement income to all citizens of India, including the unorganized sector — allowing individuals to contribute regularly towards their pension during their working life.

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Retirement Account

NPS Account

The dedicated retirement account where you make regular contributions, invested based on your chosen scheme & fund manager.

Active
Min. Contribution
₹500/-
Account Type
Individual
Pension
Min. Annual
₹1,000/-
Taxation At Maturity
60% Tax-Free
40% Annuity
Extra Tax Benefit
₹50,000/-
Lock-In
Till Age
60
Expected Return
Market-Based
Variable Returns
Eligibility Age
18 – 70 yrs
Open Account Expert Advice
PFRDA Regulated

Existing NPS Account Holder?

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Key Features

National Pension System Details are as follows:

(I) Voluntary Participation

Individuals can voluntarily enroll in the NPS and contribute towards their retirement savings.

(II) Tiered Structure

The NPS has two tiers — Tier I is a mandatory pension account with restricted withdrawals; Tier II is a voluntary savings account with greater flexibility.

(III) Tax Benefits

Contributions to the NPS Tier I account are eligible for tax benefits under Section 80CCD of the Income Tax Act, providing incentives to save for retirement.

(IV) Choice of Investment Options

NPS subscribers can choose between equity, government securities, corporate bonds, and alternative investment funds — tailoring strategy to individual risk appetite.

(V) Maturity

Upon retirement, subscribers withdraw up to 60% as a tax-free lump sum and use the rest to purchase an annuity. If corpus is under ₹2,00,000, 100% can be withdrawn as lump sum.

(VI) Premature Withdrawal

Premature withdrawal is not available under Tier I account. Partial withdrawal is only available under special circumstances with certain conditions.

Additional Tax Benefits

Exclusive Tax Benefit to all NPS Subscribers u/s 80CCD (1B): An additional deduction for investment up to ₹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 ₹1.5 lakh available under section 80C of Income Tax Act, 1961.

Apart from tax benefits under 80CCD, below are the other tax benefits available under NPS:
(I) Tax Benefits on Maturity — Up to 60% of the total corpus withdrawn in lump sum is exempt from tax.
(II) Tax Benefit on Annuity Purchase — Amount invested in purchase of Annuity is fully exempt from tax. Annuity income in subsequent years is taxable as per applicable slab.
Please note: Tax benefits are applicable for investments in Tier I account only.

NPS Pension Calculator

This pension calculator illustrates the tentative Pension and Lump Sum amount an NPS subscriber may expect on maturity, based on regular monthly contributions, corpus reinvested for annuity, and assumed rates of return.

Calculate Now

Types of Accounts

NPS scheme is structured into two tiers

Tier-I NPS Account
The permanent retirement account into which regular contributions are credited and invested as per your chosen scheme/fund manager.

Tier-II NPS Account
A voluntary/optional withdrawable account allowed only if you have an active Tier I account. Withdrawals are permitted as and when you require.

Tier – I Account Tier – II Account
Individual Pension AccountOptional Account — requires active Tier-I
Withdrawal as per Exit & Withdrawal rulesUnrestricted withdrawals
Min. contribution to open: ₹500/-Min. contribution to open: ₹250/-
Min. contribution per year: ₹1,000/-No restriction on min. contribution per year
AMC charges applicableNo separate AMC charges
—Anytime switching to Tier-I allowed

You need to choose asset classes and a Pension Fund Manager (PFM) along with the percentage allocation in each scheme.

There are four asset classes under a single PFM:

(i) Asset Class E – Equity and related instruments
(ii) Asset Class C – Corporate debt and related instruments
(iii) Asset Class G – Government Bonds and related instruments
(iv) Asset Class A – Alternative Investment Funds (CMBS, MBS, REITs, AIFs, InvITs etc.)
Allocation in Asset Class A cannot exceed 5%. Total across E, C, G, A must equal 100%. Tier-II allows 100% equity; Tier-I allows up to 75% equity.

Active Choice

You can plan and choose how your contribution is invested — choose the PFM, scheme(s), and percentage allocation in each asset class.

Asset ClassMax Allocation
EUp to 75%
CUp to 100%
GUp to 100%
AUp to 5% (Tier I only)
Auto Choice (Life Cycle Fund)

Proportion of funds across asset classes changes automatically as per your age. Three options based on risk appetite:

  • LC75 – Aggressive Life Cycle Fund
  • LC50 – Moderate Life Cycle Fund
  • LF25 – Conservative Life Cycle Fund

Frequently Asked Questions (FAQs)

Yes, the nomination is mandatory. You can appoint up to 3 nominees for both NPS Tier 1 and Tier 2 Accounts.

Normal Exit on Superannuation:
  • 100% Lump sum withdrawal allowed if corpus ≤ ₹5 Lakh.
  • If corpus > ₹5 Lakh, at least 40% must be used to purchase an Annuity; balance 60% paid as lump sum.
Premature Exit:
  • 100% Lump sum withdrawal allowed only if account is >5 years old and corpus ≤ ₹2.5 Lakh.
  • If corpus > ₹2.5 Lakh, at least 80% must be used to purchase an Annuity; balance 20% paid as lump sum.

The entire accumulated pension wealth is payable to the nominee or legal heirs if the subscriber dies before or after attaining 60 years. The nominees can opt for annuity if they desire so.

If the subscriber's death occurs before the due date of an extended period of annuity purchase, the entire accumulated pension wealth shall be paid to the nominee(s) or legal heir(s).

Upon exiting Tier-I, the Tier-II account is automatically closed, and the remaining amount is paid to the subscriber, nominees, or legal heirs.

Yes, you are eligible for exit from NPS in case of physical incapacitation or suffering bodily disability leading to incapability to continue under NPS.

Disability certificate from a government surgeon or doctor. The certificate must state the nature and extent of disability, certify inability to perform regular duties, confirm real possibility of not being able to work for the remaining life, and indicate disability percentage exceeding 75%.

You will continue to remain subscribed to the NPS up to the age of 75 years.

Yes, the subscriber has the option to purchase an annuity at any point during the deferment period by submitting a request to NPS Trust or any authorized intermediary.

  • Higher education or marriage of children
  • Purchase or construction of residential property (excluding ancestral property)
  • Treatment of specified illnesses including cancer, kidney failure, stroke, etc.
  • Medical and incidental expenses due to disability or incapacitation
  • Expenses for skill development, self-development, or establishment of ventures/start-ups

Disclaimer

  • (i) The FAQs provided above are sourced from https://www.npstrust.org.in/faqs. For additional questions or detailed information, please refer to the provided source link.
  • (ii) Investments in the National Pension System (NPS) are subject to market risks. It is advisable to thoroughly review all associated documents before proceeding with any investment decisions.

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