A. General details for NPS All Citizen Model
Permanent Retirement Account Number (PRAN)
PRAN is a unique identification number allotted to a subscriber for their Individual Pension Account opened under NPS. The PRAN remains unchanged even if the subscriber shifts employment / sector / location.
Types of accounts in NPS
NPS has two types of accounts - Tier I & Tier Il.
- Tier-l is the Individual Pension Account, which is the default pension account having all the tax incentives under Income Tax Act.
- Tier-ll is an optional investment account only available to a subscriber with an active Tier-I account. This account has no withdrawal restrictions and tax benefits. Tier-Il is not a Pension Account.
What are the features of Tier-I and Tier-Il accounts?
| Tier – I | Tier – II |
|---|---|
| Individual Pension Account | Optional Account– Require an active Tier-I |
| Withdrawal as per rules/regulations only | Unrestricted withdrawals |
| Min. Contribution ₹500 Min. | Contribution to open ₹1000 Min. |
| Contribution per year ₹1000 | Min. Contribution ₹250 |
| Tax benefits are available | No tax benefits on contribution/gains |
| Any Citizen aged between 18-70 is eligible | NRIs/OCIs are not eligible |
| Choose any Pension Fund / Investment Pattern | Choose any Pension Fund/ Investment Pattern |
- The subscriber can select different Pension Funds and Investment Options for their NPS Tier I and Tier Il accounts
Pension amount in NPS
The amount of pension will depend on the accumulated sum of contributions made, accrual/returns on the investments and the portion of corpus utilised by the subscriber for purchasing an annuity plan. Annuity Service Providers for NPS are empaneled with PFRDA. Under NPS, there is no implicit or explicit assurance of benefit, and the investments are subject to market conditions.
The best time to start NPS is the day you decide you want one.
The sooner you start, the more compounding gains you make! Isn't that wonderful?
