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New Pension System (NPS) 2015: 10 Must Know Facts


National Pension System is a retirement savings account, where an individual makes a contribution to his retirement account. New NPS 2015 is easily accessible, low cost, tax-efficient, flexible and portable.


Recently, government allowed NRIs to subcribe to the NPS account. Now, NRIs aged between 18 - 60 years, complying with the KYC norms, can open an NPS account.

In Union Budget 2015, the Finance Minister made some changes in the NPS to attract more citizen and make it popular.

New Pension System (NPS) 2015: 10 Must Know Facts

Here are 10 must know facts on NPS:

1. When the NPS account is opened, every individual subscriber is issued a Permanent Retirement Account Number (PRAN) card which has a 12 digit unique number.

2. Under NPS account, two sub-accounts - Tier I & II are provided. Tier I account is mandatory and the subscriber has option to opt for Tier II account opening and operation.

3. NPS account can be operated from anywhere in the country irrespective of individual employment and location/geography and can be transferred from one sector to another like Private to Government or vice versa or Private to Corporate and vice versa.


4. If you are making the nomination at the time of registering for PRAN, no charges will be levied to you.

5. There are two fund management schemes, one is Active choice where an individual would decide on the asset classes in which the contributed funds are to be invested and in what proportions. Another is Auto choice - Lifecycle Fund- This is the default option under NPS and where in the management of investment of funds is done automatically based on the age profile of the subscriber.

6. After this budget, NPS is eligible to get an additional tax benefit of Rs 50,000, as it is part of Sec 80CCD now.

7. The other benefit that one gets is that one can now invest in the scheme in equity as well. So, you can make a choice if you want to invest in equity or debt depending on your own risk profile, age etc.

8. The subscriber shall be allowed to withdraw only a maximum of three times during the entire tenure of subscription under the National Pension System and not less than a period of five years shall have elapsed from the last date of each of such withdrawal.

9. A subscriber has to contribute a minimum annual contribution of Rs.6000/- for his Tier I account in a financial year and if not contributed the account will be frozen.

10. Once the subscriber attains the age of 60, at least 40% of the accumulated pension wealth of the subscriber needs to be utilized for purchase of an annuity and the balance is paid as a lump sum payment to the subscriber.

Read more about: national pension system nps
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