How to apply for the NPS scheme launched by the government?

You will need to visit a point of presence (PoP), fill up the prescribed form with the required documents. Once you are registered, the Central Record keeping Agency (CRA) will send you a Permanent Retirement Account Number (PRAN), along with telephone and internet passwords.

 Submit the Subscriber registration Form with KYC documents (as mentioned in the Form) and the NPS Contribution Instruction Slip (NCIS) and minimum contribution amount to any of our authorized branch, an Initial contribution amount of Rs.500/-. The subscription Form and Contribution Slip will be available at the branches. The same can also be downloaded from http://pfrda.org.in/.

   

What is the procedure for registration of Subscribers in the CRA system?

Any Individual who wants to get registered as a subscriber and wants to open a Permanent Retirement Account (PRA)(Tier I and/or Tier II) in NPS would submit the duly filled form (Composite application form for subscriber registration) with other supporting KYC documents to POP-SP. For only Tier II account, an individual with an active Tier I account needs to approach the associated POP-SP and submit a copy of the PRAN Card along with Tier II activation form (UOS-S10).

PRAN Card is despatched to the registered address within 20 days from the day of receipt of duly filled registration form at the CRA-FC office. During this period, a subscriber can go to https://cra-nsdl.com/CRA/ and check the status of PRAN kit in CRA website https://cra-nsdl.com/CRA/ using the 17 digit receipt number provided by POP-SP. The subscriber can also contact his / her associated POP-SP. In case the application form is not filled with all the required details, CRA-FC will not accept the registration form. CRA-FC will intimate subscribers POP - SP regarding rejection of forms.

The salient features of the New Pension System (NPS) are as follows : 

• It is a pension system for the non-Government sector.
• It is open to anyone from 18 years to 60 years of age, including NRIs.
• The minimum contribution is Rs. 6,000 per year, at Rs. 500 per transaction.
• There should be a minimum of one transactions per year.
•  There is no maximum contribution.
• A subscriber must compulsorily select a pension fund manager (PFM). 

Subscriber has the option of chosing any one of following entities appointed by PFRDA to manage the investment:

• ICICI Prudential Pension Funds Management Company Limited
• IDFC Pension Fund Management Company Limited
• Kotak Mahindra Pension Fund Limited
• Reliance Capital Pension Fund Limited
• SBI Pension Funds Private Limited
• UTI Retirement Solutions Limited

• Under NPS, two types of accounts are available to the subscriber- Tier I and Tier II. The contributions in Tier I account are savings for retirement and are non-withdrawable. Tier II account is a voluntary saving account. 
•  The PRAN holder can contribute to his/her PRAN a/c through any of our designated Branch.

The Benefits to the subscribers under NPS

 What are the tax benefits of NPS?

At present, the investment is covered under section 80CCD of the Income Tax Act and a tax will be levied if you withdraw the money. You can avoid paying tax by transferring the entire corpus to the annuity service provider. 

 

The tax treatment for contribution in Tier I account is EET, "Exempted-Exempted-Taxed" i.e., the amount contributed is entitled for deduction from gross total income upto Rs. 1.00 lac (along with other prescribed investments) as per section 80C (as per the provisions of the Income Tax Act, 1961 as amended from time to time). The appreciation accrued on the contribution and the amount used by the subscriber to buy the annuity are not taxable, Only the amount withdrawn by the subscriber after the age of 60 is taxable.