An initiative undertaken by the Government of India, the National Pension System seeks to provide retirement benefits to all citizens of India, even from the unorganized sectors. Regulated and administered by the PFRDA or Pension Fund Regulatory and Development Authority under the PFRDA Act 2013, NPS is a defined, voluntary contribution scheme that is market-linked and managed by professional fund managers.

Contributions made by individual subscribers to a National Pensions Scheme under the system accumulate until retirement and corpus growth continues via market-linked returns. Subscribers also have an option to exit this plan before retirement or opt for superannuation. However, this scheme ensures that a part of savings is utilized to provide a subscriber with retirement benefits.

Thus, on retirement, exit, or superannuation, at least 40% of the contribution is utilized for the procurement of lifetime pension via the purchase of an annuity. The remaining funds are paid to the subscriber in a lump sum.

The benefits of the NPS Scheme are:

- Tax benefits u/s 80CCD(1) for self-contribution in NPS with a limit of Rs. 1,50,000/-

- Addition Tax benefit of Rs. 50,000/- u/s 80CCD(1B) for self-contribution in NPS

- Attractive market linked returns

- Professionally managed by experienced Pension Fund Managers

- Low Fund Management charges of 0.01%

- Easy portability of NPS account from one entity/sector/department/location to another

- Regulated by PFRDA, a regulator set up through an act of Parliament

- Option to continue NPS account till attainment of 70 years

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