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NPS
About NPS
National Pension System (NPS) is a voluntary, defined contribution retirement savings scheme. It is an attempt towards finding a sustainable solution to provide adequate retirement income with reasonable market based returns over the long term to every citizen of India.
NPS is regulated by PFRDA, with transparent investment norms, regular monitoring and performance review of fund managers by NPS Trust.
Who can Invest
Any individual (including minors and NRIs) up to 85 years of age is allowed to invest in NPS. However, on Fundzbazar, only resident individuals between 18 to 85 years of age can invest in NPS.
Additional tax benefit
A subscriber who contributes towards NPS scheme would get an additional benefit of 50,000 under section 80CCD (1B) which would be over and above the ceiling limit of 1,50,000 prescribed under section 80 CCE of Income Tax Act 1961.
Prudent Corporate Advisory Services Ltd has been appointed by PFRDA to act as Point of Presence (POP) for the NPS Services. We offer this services only through our online platform.
Financial Assistance on NPS
Subscribers may avail loans or financial assistance from regulated institutions by pledging their NPS account. As per PFRDA regulations, lenders can mark a lien on you NPS account through the NPS Trust.
Charges
| Intermediary | Charge Head | Service Charge* | Frequency of deduction | Mode of deduction |
|---|---|---|---|---|
| POP** | One Time Onboarding Charge | ₹ 200 per PRAN for face-to-face mode ; ₹ 100 per PRAN for fully digital mode | To be paid on quarterly basis. | Cancellation of units |
| Annual Charges | 0.20% p.a. of the AUM | Pro-rata on quarterly basis | To be adjusted through NAV | |
| Non-Financial Transaction charge | Nil | |||
| CRA (KFintech) | NPS A/C opening charge | Rs.39.36/- | One Time | Collected by cancelling units on quarterly basis |
| Account Maintenance charge | Rs.57.63/- | Annual | ||
| Financial Transaction Processing charges | Rs.3.36/- | On each transaction | ||
| Pension Fund Manager | Asset Management charge | 0.01% | Annual | Adjusted before NAV Publication |
| Custodian | Asset Servicing charge | 0.00% | Annual | |
| NPS Trust | Trust Management charge | 0.01% (no taxes applicable) | Annual |
* GST and other levies will be levied as per the existing tax laws.
** POP charges as mentioned above shall be levied at 0.05% of AUM on the last day of quarter
Non-Financial Transaction include:
- Change in subscriber details.
- Change of investment scheme / fund manager
- Processing of withdrawal request
- Processing of request for subscriber shifting
- Issuance of printed Account statement.
- Any other Subscriber services as may be prescribed by PFRDA
Product Details
Account Type
Tier - I is a mandatory and non-withdrawable account aimed at building a corpus for retirement. You can withdraw from this account subject to conditions prescribed by PFRDA. Investment made in Tier I account is eligible for tax deduction.
Tier - II is an optional account and provides liquidity by allowing anytime withdrawal facility. It is a voluntary savings facility available as an add-on to a Tier-1 account. This account can be used to accumulate funds with a medium to long term goals in mind. You can open a Tier II account along with Tier I account or any time after opening Tier I account. However, to open a Tier II account you must have an active Tier I account. Investment made in Tier II account is not eligible for tax deduction.
Choice of CRA
- Subscribers joining NPS independently can choose their preferred Central Recordkeeping Agency (CRA).
- CRA can be changed once per financial year.
- Subscribers may hold multiple PRANs across different CRAs (one PRAN per CRA).
Currently, Fundzbazar facilitates PRAN opening with KFintech CRA only. PRAN opening with other CRA will be enabled shortly.
Minimum Investment
| Particulars | Tier - I | Tier - II |
|---|---|---|
| Minimum Contribution on a/c opening | 500/- | 1000/- |
| Minimum amount of subsequent contribution | 500/- | 250/- |
| Minimum contribution per year | 1000/- | - |
| Minimum Frequency of contribution per year | 1 | - |
Investment Choice
Active Choice – Subscriber has an option to decide ratio of contribution to be allocated among three asset classes i.e. E, C & G subject to maximum limit as per following table:
| Asset Class | Where it invest | Maximum Investment limit for Active Choice |
|---|---|---|
| Class E (Equity) | Equity / Index Funds / ETFs | 75% |
| Class C (Corporate Debt) | Debt instruments | 100% |
| Class G (Gilt scheme) | Government securities | 100% |
Auto Choice – Under auto choice, your contribution is invested as per predefined allocation across the three asset classes E, C, G based on an individual’s age. Allocations changes according to change in age of subscriber with higher contributions to safer assets (i.e. Government Securities) in the later years. This is also known as Life Cycle Fund option.
There are four life cycle funds available for investment under Auto choice:
- Life Cycle 25Low - (5E/55Y)25% up to 35 years, falling to 5% at 55+
- Life Cycle 50Moderate - (10E/55Y)50% up to 35 years, falling to 10% at 55+
- Life Cycle 75High - (15E/55Y)75% up to 35 years, falling to 15% at 55+
- Life CycleAggressive - (35E/55Y)50% up to 45 years, falling to 35% at 55+
Click here to know about the age wise asset allocation under different life cycle fund.
The Multiple Scheme Framework
The Multiple Scheme Framework allows non-government subscribers to manage multiple investment schemes under a single PRAN, enabling flexible and goal-based retirement planning.
Benefits of MSF for Subscribers
- Equity exposure up to 100%
- Multiple schemes with separate NAVs under one PRAN
- 15-year vesting periodfor normal exit
- Applicable to Tier I and Tier II accounts
- Existing tax benefits remain applicable
- Low expense ratio capped at 0.30% p.a.
Scheme Variants
Pension Fund Managers may offer:
- High-Risk Schemes – Higher equity exposure for growth
- Moderate Schemes – Balanced equity and debt allocation
- Low-Risk Schemes – Focus on capital preservation
Click here to know about the detailed Multiple Scheme Framework
New NPS Investment Structure
- Active Choice and Auto Choice are now called Common Schemes (CS)
- Subscribers can invest in multiple schemes across one or more Pension Funds
- Investments can be made across Tier I and Tier II accounts
Flexibility
- Change Pension Fund Manager once per financial year
- Change investment option twice per financial year
Tax benefits on contribution
Additional tax benefits upto Rs. 50000 u/s 80 CCD (1B)
A subscriber who contributes towards NPS scheme would get an additional benefit of 50,000 under section 80CCD (1B) which would be over and above the ceiling limit of 1,50,000 prescribed under section 80 CCE.
To salaried person
A corporate subscriber is Eligible to avail tax deduction for the contribution made by employer u/s 80 CCD (2) upto 14% of salary (basic + DA) which is in addition to 150000 (80 CCE) and 50000 (80 CCD (1B))
Tax benefit under NPS is available for investment made in Tier I account only. Investment in Tier II is not eligible for tax deduction.
To self-employed
Self-employed person is eligible to avail tax exemption by investing in NPS Tier-I account upto 20% of the Gross Income under sec 80 CCD (1) of Income Tax Act.
Note: For detailed clarification about NPS tax benefit, kindly consult your tax advisor.
Tax treatment on withdrawal
- Subscribers get tax benefits on the withdrawal from Tier I account.
- At the time of exit or closing NPS account after reaching 60 years of age, upto 60% of the total corpus is exempt from tax.
- Amount utilized for the purchase of annuity at the time of exit is also exempt from tax. However, annuity income is taxable in the year of receipt at income tax slab rate.
- Partial withdrawal (upto 25% of contribution amount) from NPS is also exempted from tax.
- In case of death of subscriber, entire pension corpus in the hands of nominee/heir will be exempted from tax.
Exit & Withdrawal
| Exit Scenario /Event | Accumulated Pension Wealth (APW) at the time of exit (₹) | Utilization of Accumulated Pension Wealth (APW) | ||
|---|---|---|---|---|
| Lump Sum (Entire Lump Sum or systematic lump sum withdrawal or systematic unit redemption or as per other approved option) | Systematic Unit Redemption for at least six years | Annuity | ||
| Upon ≥ 15 years of subscription, or on attaining 60 years, or on superannuation as per regulation 4(1)(a) (or) Upon physical incapacitation as per regulation 4(1)(d) | ≤ 8 lakh | 100% | Not Applicable | Not Applicable |
| Or | ||||
| Up to 80% | Not Applicable | At least 20% | ||
| > 8 lakh ≤ 12 lakh | Up to ₹6 lakh | Balance of APW remaining after lumpsum | Not Applicable | |
| Or | ||||
| Up to ₹6 lakh | Not Applicable | Balance of APW remaining after lumpsum | ||
| Or | ||||
| Up to 80% | Not Applicable | At least 20% | ||
| > 12 lakh | Up to 80% | Not Applicable | At least 20% | |
| Upon voluntary exit as per regulation 4(1)(b) | ≤ 5 lakh | 100% | Not Applicable | Not Applicable |
| Or | ||||
| Up to 20% | Not Applicable | At least 80% | ||
| > 5 lakh | Up to 20% | Not Applicable | At least 80% | |
| Upon death as per regulation 4(1)(c ) | Any APW | Up to 100% | Not Applicable | Up to 100% |
| Exit by individuals who joined on or after 60 years as per regulation 4(1)(e ) | ≤ 12 lakh | 100% | Not Applicable | Not Applicable |
| Or | ||||
| Up to 80% | Not Applicable | At least 20% | ||
| > 12 lakh | Up to 80% | Not Applicable | At least 20% | |
| Upon death of individuals who joined on or after 60 years as per regulation 4(1)(e ) | Any APW | Up to 100% | Not Applicable | Up to 100% |
Partial withdrawal:
Eligibility
- Minimum 3 years of NPS subscription.
- Withdrawal up to 25% of own contributions.
Permitted Purposes
- Children’s education or marriage.
- Purchase or construction of first house
- Medical treatment for self or family
- Disability-related expenses
- Repayment of loans taken against NPS
Withdrawal Frequency
- Before 60 years: Up to 4 withdrawals with a 4-year gap.
- After 60 years: Unlimited withdrawals with a 3-year gap.
Important points to note about NPS withdrawal:
- To withdraw from Tier I account, you must submit a physical request form to CRA.
- You can withdraw anytime from Tier II account online by confirmation of OTP.
Grievance
For any complaints / Grievances related to NPS you can write us email or Contact us at:
Name of Grievance Redressal Officer:Roshan Mendonca
Email:[email protected]
Phone:1800 419 5051
Subscribers who do not get the benefit of redress for the delay in Turn Around Time (TAT) for various activities as prescribed in the Guidelines, can register a complaint/grievance against the concerned PoP in Central Grievance Management System (CGMS) in accordance with Pension Fund Regulatory and Development Authority (Redressal of Subscriber Grievance) Regulations, 2015 and amendments thereof and follow the escalation matrix prescribed therein.
About NPS Vatsalya
It is a government-backed pension saving scheme designed exclusively for minors (below 18 years of age). Regulated by PFRDA, it allows parents/legal guardian to start building a financial corpus for their child’s future from an early age.
Eligibility to join
All Indian citizens including Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) below 18 years of age can open NPS Vatsalya account. The account is opened and managed by a parent or legal guardian on behalf of the minor.
Note : New accounts cannot be opened at age 18 or above. Only existing NPS Vatsalya subscribers may continue under the scheme up to the age of 21.
How to open an account
The NPS Vatsalya account can be opened through the following modes:
- Online facility provided by PoPs
- Offline through Points of Presence (POPs) registered with PFRDA
- eNPS platform of NPS Trust (www.npstrust.org.in)
- Any other electronic mode approved by PFRDA
Minimum Investment
The minimum contribution to open an NPS Vatsalya account is ₹250/-, with the same amount required annually to keep the account active. There is no upper limit on contributions.
Flexibility to Change Your Preferences
You can change your PoP anytime, switch your Pension Fund once a year, and change your CRA up to twice a year — giving you full control over your account.
Choice of Pension Fund
- Guardians can choose any one pension funds that are registered with the PFRDA to manage investments.
- The investment of the contributions shall be managed by the Pension Funds.
Documents required for opening an account
- Birth Certificate, School Leaving Certificate, Matriculation Certificate, Minor PAN, or Passport
- Aadhaar, Driving License, Passport, Voter ID, NREGA Job Card, or NPR documents
- PAN of guardian or Form 60 declaration
- For NRI/OCI : Minor's sole or joint NRE/NRO bank account (mandatory)
- For Indian residents : Minor's bank account optional at opening, required at withdrawal/exit
Investment Options (Asset Classes)
| Asset Class | Indicative Limit |
|---|---|
| Equity & related investments | Up to 75% |
| Debt Instruments & related investments | Up to 30% |
| Government Securities & related investments | Up to 20% |
| Short-term debt / Money Market* | Up to 10% |
*Money Market limit applies once scheme corpus exceeds Rs. 5 crore.
*Pension Funds may also allocate up to 100% in Equity under MSF-style schemes.
Taxation Benefit
| Stage | Old Tax Regime | New Tax Regime |
|---|---|---|
| Contribution | Deduction up to Rs. 50,000 under Sec. 124(4) of IT Act, 2025 for parent/guardian contributions | No deduction available |
| Partial Withdrawal | Exempt (up to 25% of own contributions) | Same as old regime |
| Exit / Closure |
| Same as old regime |
Withdrawal & Exit
Partial Withdrawal
- Purpose - Education of minor | Treatment of specified illnesses | Disability >75%
- Lock-in period - 3 years from account opening date before first withdrawal
- Withdrawal Limit - Up to 25% of own contributions (excluding returns)
- No. of withdrawal - Up to 2 before age 18 and up to 2 more between ages 18–21
Continuation & Exit
Upon turning 18, the subscriber must complete fresh KYC and furnish nominee details. Post KYC, the subscriber has four options
- Option A : Continue under NPS Vatsalya until age 21 (with 2 additional partial withdrawals available)
- Option B : Shift the entire corpus seamlessly to NPS All Citizen Model or other applicable model
- Option C : Withdraw up to 80% as lump sum and use the balance to purchase an annuity
- Option D : Withdraw 100% of corpus if total amount is below Rs. 8 lakh
Note : If no option is chosen by age 21: The account automatically shifts to NPS under a higher-equity scheme (Multiple Schemes Framework) under the same Pension Fund Manager.
If KYC is not completed after age 18: No transactions allowed. Account becomes dormant at age 21.
Death of Subscriber/Guardian
| Exit due to death |
|
|---|---|
| If guardian predeceases subscriber | New guardian is required to be registered by submitting necessary KYC documents. |
| If both parents predecease subscriber | Legally appointed guardian may continue the account with or without contribution. |
Grievance
Any grievance under NPS Vatsalya can be lodged through the Central Grievance Management System (CGMS) of your respective CRA or directly via the NPS Trust website at https://npstrust.org.in/lodge-a-grievance.
PFRDA has also developed Pension Sahayak — an AI-powered grievance portal accessible through web, mobile, WhatsApp and IVR, with multilingual support for easy complaint handling. All grievances are required to be resolved within 30 days from the date of receipt.
If you are not satisfied with the resolution, you can escalate through the following escalation matrix:
Intermediary → NPS Trust → Ombudsman → PFRDA → SAT (Securities Appellate Tribunal)
For grievance redressal guidelines, visit: https://npstrust.org.in/grievance-redressal-policy
Benefits Of NPS
Additional Tax Benefit
Additional tax deduction of Rs. 50,000 is available by investing in NPS u/s 80CCD(1B) which is over and above 1.5 Lakh tax deduction under 80C
Portability
NPS account can be managed from anywhere in the country irrespective of the employment and geography
Flexibility
Subscribers have an option to choose – Pension Fund Manager, Asset Allocation (Equity, Corporate debt, Government Securities) and choice of Automatic asset allocation based on Investment Life Cycle.
Superior Returns
As returns are market linked, NPS has potential to deliver higher inflation adjusted returns
NPS Providers
Pension Management Limited
Management Ltd.
Managers Ltd.
Management Limited
Funds Management Company Limited
Fund Ltd
Limited
Private Limited
Private Limited
Limited
Head Office: Prudent House, Panjrapole Cross Road, Nr. Polytechnic, Ambawadi, Ahmedabad - 380 015, Gujarat, India.
- [email protected]
- 1800 419 5051
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Prudent Corporate Advisory Services Limited
AMFI Registered Mutual Fund & Specialized Investment Fund (SIF) Distributor
APMI Registered PMS Distributor
CIN: L91120GJ2003PLC042458
AMFI Reg No.: ARN-9992 (Date of initial Registration; 02 September 2003; Current validity of ARN –26 August 2028)| APMI Reg No.: APRN-00423 (Date of initial Registration; 11 August 2022; Current validity of APRN –10 August 2028) | SEBI Stock Broker Reg.: INZ000293634 | SEBI Research Analyst Reg. INH000018115 | SEBI Depository Reg.: IN-DP-477-2020 | NSE Member Id: 90209| BSE Member Id: 6733 | CDSL DP ID: 12090600 | NSDL DP ID: IN304981 | SEBI Investment Advisor Reg.: INA000004906 | PFRDA POP Reg.: POP 10092018 | IRDA Corporate Agent Reg. No. CA0869
* Mutual Fund investments are subject to market risks. Please read all scheme related documents carefully before investing.
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