Regulated and administered by the Pension Fund Regulatory and Development Authority(PFRDA), National Pension Scheme is a reliable government-backed plan. Any individual aged between 18 years and 60 years can open the National Pension Scheme Account.
As National Pension Scheme allows individuals to make systematic investments, liquidity is never an issue. An eNPS account can also be opened if you have Pan Card or Aadhar Card.
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In this article, you will understand more about NPS Tier-II, its features, benefits, and more.
National Pension Scheme is best suited for individuals who are unable to decide their asset allocations or do not have time to manage their investment.
An NPS is a completely government-backed scheme and any person who wants to plan their early retirement and does not wish to take high risks should undoubtedly go for it.
A salaried person who wants to take the best advantage of 80C deductions should consider National Pension Scheme.
Any Indian citizen who wishes to can opt for a National Pension Scheme account. once opted, the holder will have a Tier-I account by default.
The NPS holder can voluntarily opt for a Tier-II account. Once you get a Tier-II account, you can
You can either go for an offline or online method to open a National Pension Scheme Account
Tier-II account under National Pension Scheme comes with the following benefits
As per PFRDA Regulations of 2015, the reason for exit from Tier-II account must be one of the following:
National Pension Scheme |
||
Tier I |
Tier II |
|
Eligibility |
Any Indian citizen between 18 & 65 years of age |
Members of Tier-I only |
Lock-in Period |
Till the age of 60 years |
NIL |
Minimum number of contributions per annum |
1 |
Nil, not important to contribute every year |
Minimum amount for account opening |
Rs 500 |
Rs 1,000 |
Minimum subsequent contribution |
Rs 500 |
Rs 250 |
Minimum amount contribution per annum |
Rs. 6000 |
NIL |
Fund management charge |
Same as Tier-II |
Same as Tier-I |
Available asset classes |
Same for both |
|
Equity (E): Predominant investment in Equity market instruments. Maximum 75% |
||
Corporate Debt (C): Scheme invests in Bonds issued by Public Sector Undertakings (PSUs), Public Financial Institutions (PFIs), Infrastructure Companies and Money Market Instruments |
||
Government Securities (G): Scheme invests in Securities issued by Central Government, State Governments and Money Market Instruments |
||
Alternative Investment Funds (A): In this asset class, investments are being made in instruments like CMBS, REITS, AIFs, etc. |
||
Tax benefits |
For Tier-I investments, tax is deductible within the total ceiling of 1.5 lakh under Section 80CCD (1) |
No tax benefit |
Allowed up to Rs.50,000 as deductions towards Tier-I contributions under 80CCD 1(B) |
National Pension Scheme is a reliable government-backed plan which creates a financial corpus for an individual even after retirement. With more amendments and improvisations being made by the government, this scheme is considered simple and easy than other pension schemes in the market.
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