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    Facts - National Pension Scheme (NPS)

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    rupesh
    NPS is a government-sponsored pension scheme that allows Indian citizens between 18-65 to save for retirement. Employees can receive tax benefits by contributing 10% of their basic salary to NPS. The funds have lower market risk than other pension plans. Employers can deposit funds monthly in designated banks like Yes Bank. Employees receive a permanent retirement account number and can monitor and transfer their funds. Withdrawals are allowed starting at age 60, or earlier with restrictions. The company will deduct contributions from April 2018 payroll and facilitate opening NPS accounts.

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    Facts - National Pension Scheme (NPS)

    Uploaded by

    rupesh
    65 views2 pages
    NPS is a government-sponsored pension scheme that allows Indian citizens between 18-65 to save for retirement. Employees can receive tax benefits by contributing 10% of their basic salary to NPS. The funds have lower market risk than other pension plans. Employers can deposit funds monthly in designated banks like Yes Bank. Employees receive a permanent retirement account number and can monitor and transfer their funds. Withdrawals are allowed starting at age 60, or earlier with restrictions. The company will deduct contributions from April 2018 payroll and facilitate opening NPS accounts.

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    NPS is a government-sponsored pension scheme that allows Indian citizens between 18-65 to save for retirement. Employees can receive tax benefits by contributing 10% of their basic salary to NPS. The funds have lower market risk than other pension plans. Employers can deposit funds monthly in designated banks like Yes Bank. Employees receive a permanent retirement account number and can monitor and transfer their funds. Withdrawals are allowed starting at age 60, or earlier with restrictions. The company will deduct contributions from April 2018 payroll and facilitate opening NPS accounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    65 views2 pages

    Facts - National Pension Scheme (NPS)

    Uploaded by

    rupesh
    NPS is a government-sponsored pension scheme that allows Indian citizens between 18-65 to save for retirement. Employees can receive tax benefits by contributing 10% of their basic salary to NPS. The funds have lower market risk than other pension plans. Employers can deposit funds monthly in designated banks like Yes Bank. Employees receive a permanent retirement account number and can monitor and transfer their funds. Withdrawals are allowed starting at age 60, or earlier with restrictions. The company will deduct contributions from April 2018 payroll and facilitate opening NPS accounts.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Facts - National Pension Scheme

    Question: What is National Pension Scheme (NPS)

    Answer: NPS is a pension scheme launched by Government of India which allows citizens of India (18-
    65yrs) to effectively plan for their retirement through safe and reasonable returns routed through
    designated banks & financial institutions
    Question: Why join National Pension Scheme (NPS)

    Answer: Employees can avail tax exemption (benefit) on 10 % of the basic salary deposited in NPS
    account under 80CCD (2). This will be in addition to voluntary contribution of INR 50000 deposited in
    NPS under section 80 CCD (1B).

    Moreover, NPS is a Government sponsored Pension Scheme. It is well regulated, transparent and
    flexible scheme. So, the funds have lesser market risk in comparison to other pension plans.

    Question: How will employer make payment for my contribution in NPS.

    Answer: Company has discussed with various banks i.e. Yes Bank, ICICI & State Bank of India and finally
    decided to go with Yes Bank for deposits in NPS account of employees. The employees can however
    monitor their funds observing the market trends. Each employee will get a Permanent Retirement
    Account Number (PRAN), which will be easily transferable. NPS account can be operated from
    anywhere in the county irrespective of the employer and geography.

    Question: Can the amount be withdrawn before attaining the age of 60 years?

    Answer: The options of withdrawal are as follows:

     At any point before 60 years, there is an option of partial withdrawal up to 25% of own
    contribution, after lock-in period of 3 years, 3 times during the tenure.

     If any employee wishes to discontinue the NPS scheme before 60 years of age, 20% of the sum
    can be withdrawn as lump sum & rest 80% needs to be used to buy annuity

     On retirement, Max 60% of the corpus amount can be withdrawn as lump sum and at least 40%
    of the corpus is required to be used to buy annuity

     On retirement, annuity can be bought tax free and 40% of the corpus amount is also tax free.
    However annuity as received in further years shall be taxable as per the Tax Bracket at that
    point of time to individuals
     In case of death due to any cause, nominee will receive 100% of pension wealth in lump-sum

    Question: How the NPS scheme will be operated

    Answer: Company will deduct 10 % of the basic salary of the interested employees (Who opts for the
    scheme) and will deposit in Yes Bank as monthly contribution. All the necessary processes/opening an
    NPS account in Yes Bank will be facilitated by the company however the fund can be managed by the
    individual employees for the maximum returns.

    Question : When the NPS Scheme will be functional

    Answer : With effect from 1st April, 2018.

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