National Pension Scheme (NPS) is an easily accessible, low-cost, tax-efficient, flexible, and portable retirement savings account. Under the NPS, the individual contributes to his retirement account, and also his employer can also co-contribute for the social security/welfare of the individual. NPS is designed on defined contribution basis wherein the subscriber contributes to his account, there is no defined benefit that would be available at the time of exit from the system and the accumulated wealth depends on the contributions made and the income generated from investment of such wealth.

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The greater the value of the contributions made, the greater the investments achieved, the longer the term over which the fund accumulates and the lower the charges deducted, the larger would be the eventual benefit of the accumulated pension wealth likely to be.

Eligibility  
Any citizen of India, whether resident or non-resident, is subject to the following conditions: Individuals, who are aged between 18-60 years as on the date of submission of his/her application to the POP/ POP-SP. The citizens can join NPS either as individuals or as an employee-employer group(s) (corporates) subject to submission of all required information and Know your customer (KYC) documentation.

After attaining 60 years of age, you will not be permitted to make further contributions to the NPS accounts.

Account Login
NPS is distributed through authorized entities called Points of Presence (POPs) and almost all the banks (both private and public sector) are enrolled to act as Point of Presence (POP) under NPS apart from several other financial institutions. To invest in NPS, you will be required to open an NPS account through the Point of Presence (POP) and who will assist the subscriber in opening the account including the filling up of necessary forms, providing the information about NPS, and any other relevant information in this regard.

Features
The following are the most prominent features of the retirement account under NPS: Every individual subscriber is issued a Permanent Retirement Account Number (PRAN) card and has a 12-digit unique number. In case of the card being lost or stolen, the same can be reprinted with additional charges.
Under the NPS account, two sub-accounts – Tier I & II are provided. Tier I account is mandatory and the subscriber has the option to opt for Tier II account opening and operation.

The following are the salient features of these sub-accounts: Tier-I account - This is a non-withdrawable retirement account that can be withdrawn only upon meeting the exit conditions prescribed under NPS. Tier-II account - This is a voluntary savings facility available as an add-on to any Tier-1 account holder. Subscribers will be free to withdraw their savings from this account whenever they wish.

Tax benefit to employee
Individuals who are employed and contributing to NPS would enjoy tax benefits on their own contributions as well as their employer’s contribution as under:

(a) Employee’s own contribution - Eligible for tax deduction up to 10 per cent of salary (Basic + DA) under Section 80 CCD(1) within the overall ceiling of Rs 1 lakh under Sec 80 CCE.

(b) Employer’s contribution – The employee is eligible for tax deduction up to 10 per cent of salary (Basic + DA) contributed by the employer under Sec 80 CCC(2) over and above the limit of Rs 1 lakh provided under Sec 80 CCE.

Tax benefit for self-employed
Eligible for tax deduction up to 10 per cent of gross income under Sec 80 CCD (1) within the overall ceiling of Rs 1 lakh under Sec 80 CCE.