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PFRDA introduces new measures for CPSE employees in National Pension System (NPS)
Pension Fund Regulatory and Development Authority (PFRDA) has stated that the government has amended the Income Tax Act providing for tax free migration of super annuation funds to NPS.
Separately, based on the recommendation of the 3rd Pay revision committee, it was decided to dispense the condition of minimum 15 years of services and superannuation from CPSEs to avail the benefit implemented by CPSEs.
Also, individuals can now subscribe to NPS upto the age of 65 years and can defer the purchase of annuity to three more years post retirement and defer lump-sum withdrawal in phased manner over a period of 10 years.
Earlier, a individual was allowed to exit his/her NPS before the age of 60 – with only 20% accumulated savings allowed for withdrawal and remaining 80% invested in annuities.
This provision is expected to facilitate the CPSEs to implement NPS for their employees.
Dr. Badri S. Bhandari, Whole Time Member, PFRDA expressed the endeavor of PFRDA to expand NPS across all the sectors in India in affordable and sustainable manner. He explained the benefits of NPS and communicated the returns generated by Pension Funds since inception, which has been over 10% since inception.
Moreover, on October 10, the PFRDA stated that the Atal Pension Yojana (APY) is also now available on eNPS platform. It said, “So far APY is available for subscription through Banks, BCs and through internet banking. Now, APY is available on eNPS platform and any eligible Indian citizen can enroll through the APY@eNPS channel by visiting www.enps.nsdl.com.”
As on 30th September, 2017, there were 1.78 crore subscribers and Rs 2.06 lakh crore of AUM under NPS. The growth in subscribers and the asset under management jump stood at 27% and 47%, respectively.
NPS is a pension scheme regulated by the central government. While this scheme is mandatorily covered for all the government employees, the platform is also open to all Indian citizen on volantary basis.
While opting NPS, you are open to a variety of tax benefits.
Firstly under Section 80C, investments in the NPS of up to Rs 1.5 lakh are eligible for tax benefits.
Further under Section 80CCD(2), deductions made by your employer to your NPS account can also earn a tax break. Although, deduction under this scheme must not exceed 10% of your salary.
Also, claim comes under Section 80CCD(1B) of up to Rs 50,000 in a financial year.
So far, the NPS has managed to deliver an average of 8% to 10% annualized returns compared to other tax-savings investment options under Section 80C.
For Account opening under NPS you would need have the following details.
- Have Mobile number, email ID and an active Bank account with net Banking facility enabled.
- Have an Aadhaar (with a mobile number registered with Aadhaar) or a PAN Card.
- In case, an applicant selects to open the individual pension account with PAN, the activation of the PRAN is subject to KYC verification by the empanelled Banks (name and address should match with bank record) selected by applicant during the registration process.(not required in case of Aadhaar).
- Fill up all the mandatory details online.
- Scan and upload your photograph (optional if verification is done through Aadhaar) and signature.
- Make online payment (Minimum amount of Rs 500).
- Print the form, paste photograph & affix signature and submit the Form to CRA.