Salient Features of NPS
- eNPS: The online portal for registration and contribution (eNPS) has been provided
under NPS. Using the facilities available in the eNPS portal, a Subscriber can register
under NPS, generate a Permanent Retirement Account Number (PRAN) and contribute
to his/her Permanent Retirement Account. Further, the Subscribers already registered
under NPS and having active PRAN can make contributions through eNPS in their Tier I
as well as Tier II NPS accounts.
- Low Cost of Investment: The investment cost is very low as compared to other
investment products available in the market.
- Flexible: The subscriber has the option to choose from an assortment of asset
classes (Equity, Corporate Debt & Government Securities) and can have the freedom to
invest in a variety of Pension Funds. Taking into account the limited financial
wherewithal of some of the subscribers to actively manage their investments PFRDA
has further provided two modes of fund investment- Active Choice for them to actively
manage their investments and Auto Choice- Lifecycle Fund for them to passively
manage their investments.
- Online Access- 24 X 7 X 365: Riding on a highly efficient technological platform NPS
provides online access to accounts to the subscribers.
- Returns: The returns are attractive and market linked. The CAGR returns, since
inception.
- Regulated: The funds are managed by Pension Funds appointed and actively
monitored and regulated by PFRDA, the Regulator set up through an Act of Parliament.
- Portable: The NPS can be operated from anywhere in the country even if one
changes the job location or the job itself.
- Tax Incentives: Tax benefits are available on both employee and employer
contributions. The employee can save tax on his own contribution [u/s 80 CCD (1) of IT
Act] as well as the contribution made by employer [u/s 80 CCD (2)].
For employees, deduction from taxable income is available upto 10 % of salary
(Basic + DA) - u/s 80 CCD (1) of IT Act 1961, subject to max. of Rs.1.00 Lakh within
overall ceiling of Rs.1.50 Lakh u/s 80 CCE of IT Act 1961. Additionally, if employer, is
also contributing towards pension accounts of the employee, an additional deduction of
10 % of salary (Basic + DA) is available to the employees u/s 80 CCD (2).
Furthermore, the employer, opting for subscribing to can claim these
contributions upto 10% of (Basic salary+ DA) as a Business Expense u/s 36(1) iv (a) of
the IT Act.