National Pension Scheme

National Pension Scheme (NPS)

NPS (additional investment of Rs. 50,000/- will be eligible for tax deduction under section 80CCD (1B) of Income Tax Act, 1961.)

What is National Pension Scheme (NPS)?

NPS (National Pension System) is a defined contribution based pension system launched by Government of India with the following objectives:

TO PROVIDE OLD AGE INCOME

REASONABLE MARKET BASED RETURNS OVER LONG RUN

EXTENDING OLD AGE SECURITY COVERAGE TO ALL CITIZENS

It is based on a unique Permanent Retirement Account Number (PRAN) which is allotted to each subscriber upon joining NPS. The Government of India in exercise of their executive powers adopted 'National Pension System' (NPS) based on defined contributions in respect of all new entrants to central government services, except the armed forces, with effect from 1st January 2004. Most of the state governments have since notified a similar pension system for their new entrants. NPS accumulates savings into subscribers PRA while he is working and use the accumulations at retirement to procure a pension for the rest of his life.

Salient Features

NPS offers wide range of benefits to individuals, making it a unique investment opportunity. Some of the salient features of NPS are:

Portable Account
The NPS account (PRAN) remains the same irrespective of change of employment or geography.

Online Platform
On joining NPS, each subscriber gets a login ID and password of NSDL system for accessing NPS details online.

More Offers
It offers subscribers choice of service providers, funds, investment options, pension fund managers, annuity service providers freedom to switch and annuity plans managers.

Prudently Regulated
NPS is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS Trust.

Multiple Options
SMC offers you a choice of funds, fund managers and investment options in National Pension system.

Transparent Investment Norms
Investment Portfolio under each asset class can be viewed on respective pension fund manager’s website.

Efficient Grievance Management
Through CRA / PFRDA website, call center, email or postal mail.

Low Cost of Operations
With 0.01% as fund management charge, NPS is one of the world’s least cost investment options.

Tax Benefits Under NPS

Individual subscriber (salaried as well as self employed) can avail of the tax benefits as mentioned below:

FOR SALARIED INDIVIDUAL
Eligible for tax deduction of up to 10% of salary (Basic + Dearness Allowance) under section 80CCD (1) of Income Tax Act, 1961 within Rs. 1.5lac limit under section 80CCE.

FOR SELF EMPLOYED
Eligible for tax deduction of up to 10% of gross income under section 80CCD (1) of Income Tax Act, 1961 with in Rs. 1.5Lac limit under section 80CCE. As per the Finance Bill 2015, additional investment of Rs. 50,000/- will be eligible for tax deduction under section 80CCD (1B) of Income Tax Act, 1961. This benefit will be effective AY 2016 – 17.

Risk Factor :

All investments in mutual funds are subject to market risks and the NAV of the schemes may go up or down depending upon the factors and forces affecting the securities market and there can be no assurance that the fund's objectives will be achieved. Past performance of the Fund does not indicate the future performance of the Schemes of the Fund.