From 1st January 2004, the Government of India launched the National Pension Scheme. Barring the Armed Forces, all new employees of the Central Government had to contribute to it. The objective was to inculcate the habit of saving for retirement.From 1st May 2009, NPS is available to all Indian citizens, including the unorganized sector, on a voluntary basis.
To develop and regulate the pension market, the government set up the Pension Fund Regulatory and Development Authority. The PFRDA has authorised some banks, private financial institutions and the Department of Posts for opening NPS accounts for citizens.
How it works
• Each subscriber is allotted a unique PRAN (Permanent Retirement Account Number), which won’t change, and can be used throughout the country.
• PRAN gives access to two Accounts:
Tier-I: You can check the accumulated sum but cannot withdraw from it.
Tier-II: It is a voluntary savings account. The subscriber can withdraw at will. However, there are no tax benefits in this account.
Tier-I Account benefits
Investments in a Tier-I Account are exempt under Section 80 C, although the withdrawal of pension would be taxable. All charges of a Tier-I Account are paid by the employer.
Service Tax and other levies would be charged as applicable.
NPS benefits
• Know the value of investment on a daily basis.
• PRAN stays the same even if you are transferred.
• PFRDA regularly monitors the performance of the fund managers.
Start your pension savings today.
To develop and regulate the pension market, the government set up the Pension Fund Regulatory and Development Authority. The PFRDA has authorised some banks, private financial institutions and the Department of Posts for opening NPS accounts for citizens.
How it works
• Each subscriber is allotted a unique PRAN (Permanent Retirement Account Number), which won’t change, and can be used throughout the country.
• PRAN gives access to two Accounts:
Tier-I: You can check the accumulated sum but cannot withdraw from it.
Tier-II: It is a voluntary savings account. The subscriber can withdraw at will. However, there are no tax benefits in this account.
Tier-I Account benefits
Investments in a Tier-I Account are exempt under Section 80 C, although the withdrawal of pension would be taxable. All charges of a Tier-I Account are paid by the employer.
Service Tax and other levies would be charged as applicable.
NPS benefits
• Know the value of investment on a daily basis.
• PRAN stays the same even if you are transferred.
• PFRDA regularly monitors the performance of the fund managers.
Start your pension savings today.
0 comments: