National Pension System: Know Key Details!

BusinessNational Pension System: Know Key Details!


Business Desk – NPS (National Pension System) is a part of the pension sector which was launched by the Government of India in 2004. With this, individuals can invest their money in different portfolios government bonds, corporate debentures, and equities by professionals, etc.

It is regulated by the Pension Fund Regulatory and Development Authority (PFRDA) and Indians aged between 18-70 years are eligible to open an account with NPS.

In NPS account individuals can choose one of the many Pension Fund Managers which allowed them to invest their money properly. Also, they can change the PFM once in a Financial Year.

NPS Account Types

When an individual opens an account with NPS, he/she were allotted a unique Permanent Retirement Account Number. With this Permanent Retirement Account Number, he/she can choose a Tier-I account or upgrade it one level higher.

Tier-I account is a non-withdrawable permanent retirement account with a minimum investment of 500. It is based on the chosen portfolio.

Tier-II accounts can only be opened if an individual has an active Tier-I account. The minimum investment during account opening is Rs 1,000 and it allows withdrawals as per the needs.

NPS Tax Benefits

Tier-I provides tax benefits, with this the individual is eligible for tax deduction under section 80 CCD (1) up to Rs 1.50 lakh. Under section 80CCD 1(B), the tax deduction for contributions to NPS up to Rs 50,000.


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