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December 08, 2016

National Pension System

What is National Pension System?
The Government of India (GOI) rolled out the NPS for all citizens of India from May 1, 2009 and Corporate sector from December, 2011.

The person (employee/citizen) who joins the NPS will be known as "Subscriber" in the NPS. Under the NPS, each Subscriber will open an account with Central Recordkeeping Agency (CRA) which will be identified through unique Permanent Retirement Account Number (PRAN).

Under NPS, two types of account would be available to subscribers i.e. Tier I & Tier II; Tier I account - where subscribers contribute his / her savings (may include employers contribution in case of Corporate sector) for retirement into a non-withdrawable account, and a Tier II account - a voluntary savings account from which subscribers are free to withdraw their savings whenever he wishes. The facility of Tier II account was made available from December 01, 2009 to All Citizens of India including Govt. employees and Corporate sector subscribers not mandatorily covered under NPS. An active Tier I account will be a pre requisite for opening of a Tier II.

What are the benefits of NPS?
1.It is voluntary - NPS is open to every Indian Citizen. A subscriber can choose the amount he wants to set aside and save every year.
2.It is simple - All the subscriber has to do is to open an account with any one of POPs (Point Of Presence) and get a PRAN.
3.It is flexible - Subscribers can choose their own investment option and pension fund and see their money grow.
4.It is portable - Subscribers can operate their account from any where in the country, even if they change the city, job or their pension fund manager.
5.It is regulated - NPS is regulated by PFRDA, with transparent investment norms and regular monitoring and performance review of fund managers by NPS Trust.


What are the tax benefits of NPS?
Tax benefit to employee:
Individuals who are employed and contributing to NPS would enjoy tax benefits on their own contributions as well as their employer’s contribution as under: -
(a) Employee’s own contribution - Eligible for tax deduction up to 10% of Salary (Basic + DA) under Section 80 CCD(1) within the overall ceiling of Rs. 1.5 lac under Sec 80 CCE.
(b) Employer’s contribution – The employee is eligible for tax deduction up to 10% of Salary (Basic + DA) contributed by employer under Sec 80 CCC(2) over and above the limit of Rs. 1.5 lac provided under Sec 80 CCE.

Tax benefit for self-employed:
Eligible for tax deduction up to 10 % of gross income under Sec 80 CCD (1) with in the overall ceiling of Rs. 1.5 lac under Sec 80 CCE.

Which document can a subscriber use as an investment proof in order to avail the tax benefit?
The print out of the Transaction Statement could be used as a document for claiming Tax benefit.


Can a subscriber get loan under NPS ?
At present, interim utilization of pension wealth (such as availing of loan) by the subscriber before exit is not allowed under NPS. However, in line with the PFRDA Act 2013, PFRDA is considering the option of interim withdrawal and, the same is yet to be finalized. For more detailed guidelines/circulars regarding withdrawal, you may visit PFRDA website (www.pfrda.org.in) as well as on CRA website (www.npscra.nsdl.co.in).


Who is the regulator for NPS?
Pension Fund Regulatory and Development Authority (PFRDA): A regulatory body set up by the Government of India to develop and regulate the pension market in India. PFRDA is the regulator for NPS.


Who are the other entities in NPS?
NPS architecture consists of NPS Trust which is entrusted with safeguarding subscribers interests, a Central Recordkeeping Agency (CRA) which maintains the data and records, Point of Presence (POP) and aggregators as collection and distribution arms, competing pension fund managers for generating and maximizing returns on investments of subscribers, custodian to take care of the assets purchased by the Fund managers and Trustee bank to manage the banking operations. The entities involved in NPS are as follows
NPS Trust : The National Pension System Trust (NPS Trust) was established by PFRDA on 27th February, 2008 with the execution of the NPS Trust Deed. The NPS Trust has been set up and constituted for taking care of the assets and funds under the National Pension System (NPS) in the interest of the beneficiaries (subscribers). Individual NPS subscribers shall be the beneficiaries of the NPS Trust. The NPS fund are managed by the Board of Trustees to realize and fulfill the objectives of the NPS Trust in the exclusive interest of the Subscribers.
Central Recordkeeping Agency (CRA): The recordkeeping, administration and customer service functions for all subscribers of the NPS are being handled by NSDL e-Governance Infrastructure Limited, which is acting as the Central Record-keeper for the NPS.
Pension Fund Managers (PFMs): The Pension Fund Managers (PFMs) means an intermediary which has been granted a Certificate Of Registration by the Authority as a Pension Fund for receiving contributions, accumulating them and making payments to the subscriber in the manner as may be specified by the Authority.
Trustee Bank : Axis Bank Ltd has been appointed by PFRDA as the Trustee Bank for National Pension System (NPS) effective from 1st July, 2013. Trustee Bank as an intermediary is responsible for the day-to-day flow of funds and banking facilities in accordance with the guidelines/ directions issued by the Authority under NPS. It receives NPS funds from all Nodal Offices and transfers the same to the Pension Funds /  Annuity Service Providers/other intermediaries as per the operational guidelines.
Annuity Service Providers (ASPs): ASPs would be responsible for delivering a regular monthly pension to the subscriber after he/she exit from the NPS. ASP have been appointed by PFRDA.
Point of Presence (POP): Points of Presence (POPs) are different financial Institutions who acts as the first points of interaction of the NPS subscriber with the NPS architecture. The authorized branches of a POP, called Point of Presence Service Providers (POP-SPs), will act as collection points and extend a number of customer services to NPS subscribers.
Central Recordkeeping Agency Facilitation Center (CRA-FC): CRA-FC is the entity appointed by NSDL to extend various services under NPS, to its users across the country. The entities who have been appointed as CRA-FC shall establish multiple branches across the country to provide services to the POPs and POP-SPs.
Corporate Head Office (CHO): A Corporate wishing to provide NPS to its employees under the Employer - Employee relation, can join NPS by registering as a Corporate Head Office through a POP. The different branches of the corporate can  be registered as a Corporate Branch Office (CBO).


What are the services offered by CRA?
Following are the services offered by CRA to the Subscribers
1.CRA shall register the Subscribers and allot unique Permanent Retirement Account Number (PRAN) to them.
2.CRA shall also issue a PRAN card and User-ID, I-Pin and T-Pin to access CRA website and CRA call centre.
3.CRA shall maintain the Permanent Retirement Account of the Subscribers and shall facilitate the creation of units in Subscribers account as per the contribution details and funds received from the POP-SP Offices.
4.At the end of every financial year, CRA shall send a Transaction Statement to the Subscriber containing the details of the transactions in Subscribers' Permanent Account.
5.CRA shall register the grievances and send the resolution details to the Subscribers.
6.CRA shall provide I-Pin based login for subscribers to view their account details in CRA website https://cra-nsdl.com/CRA/.


What is the procedure for registration of a Corporate in the CRA system?
Any Corporate who wants to get registered in NPS would submit the duly filled CHO-1 Form (Form for Registration of Corporates) with other supporting KYC documents to a POP of its choice. The POP will verify the Form and the documents and will forward the same to the CRA for registering the Corporate. Once the Corporate is registered in the CRA system the Corporate is issued a CHO Registration Number.

Who can subscribe in NPS?
Any citizen of India, whether resident or non-resident, aged between 18 – 60 years as on the date of submission of his/her application to the POP/ POP-SP. The citizens can join NPS either as individuals or as an employee-employer group(s) (corporates) subject to submission of all required information and Know your customer (KYC) documentation. After attaining 60 years of age, the subscriber will not be permitted to make further contributions to the NPS accounts.
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 subscribers covered under Corporate sector, the duly filled CS-S1 form needs to be provided to the Corporate office for onward submission to the associated POP.

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).

A subscriber is required to make the first contribution at the time of applying for registration. (Minimum contribution Rs.500 for Tier I and Rs.1000 for Tier II ) with duly filled NCIS (NPS Contribution Instruction Slip). However, this initial contribution is optional in case of Corporate Model. The POP-SP provides a Receipt no. (as an acknowledgement) to the Subscriber.
Where can a Subscriber get the Subscriber Registration Forms?

Application form for registration of Subscribers can be downloaded from the CRA website www.npscra.nsdl.co.in
Link: Subscriber Corner > Forms > for Subscriber registration.
How can a subscriber check the status of his PRAN application?

Subscriber can check the status by accessing CRA website: https://cra-nsdl.com/CRA/ by using the 17 digit receipt number provided by POP-SP or the acknowledgement number allotted by CRA-FC at the time of submission of application forms by POP-SP. The subscriber can also check the status with the associated nodal office. Once the PRAN is generated, an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of the subscriber. CRA also intimates the Subscriber about the despatch details once the PRAN kit for the subscriber is dispatched.
Under the Corporate model the status of the request or the receipt no. (if provided) needs to be checked with the respective POP / Corporate.
What is PRAN and PRAN Kit?

On successful registration, a PRAN (Permanent Retirement Account Number) will be allotted to the subscriber. A PRAN Kit containing PRAN card, Subscriber details (referred as Subscriber Master List) and an information booklet is sent to the subscriber's registered address. The T-Pin and I-Pin are sent separately to the registered address. In case of the Corporate Sector subscriber, the PRAN Kit alongwith T-PIN & I-PIN will either be sent to the subscriber's registered address or at the Corproate Head Office as per the option selected by the Corporate.

The PRAN Card is a document with PRAN, subscriber's name, father's name, photograph and signature/thumb impression. This card proves the completeness of information in the CRA system. A copy of the card is required for Tier II activation and also for subsequent contribution in Tier II account.

The Subscriber Master List shows all the information as provided by the Subscriber in his / her application and accordingly captured in CRA system. A subscriber may verify the correctness of the information submitted for registration by looking at the Subscriber Master List.
How much time is required for registration?

After the registration form is submitted to DDO, the same is forwarded to a CRA - Facilitation Centres after authorisation by the PAO. PRAN is generated and the PRAN card is printed and despatched within 20 days from the date of receipt of duly filled registration form at the CRA - Facilitation Centre.
How do subscribers come to know about their PRAN?

Once the PRAN is generated, an email alert as well as a SMS alert will be sent to the registered email ID and mobile number of the subscriber. For security reason, only the last four digits are mentioned in the alert. Subscribers can know the PRAN on receipt of the PRAN Kit or they can also approach their POP-SP for the PRAN.
Can a CRA-FC reject the Subscriber application forms?
POP-SP will perform verification checks, such as whether name is mentioned, photograph is attached, signature is present, other mandatory fields (other supporting documents for KYC norms as prescribed by PFRDA) are properly filled, scheme preference details are mentioned as required, first time contribution amount etc. before accepting the form. 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.
Whom to contact for non receipt of PRAN Card?
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. In case of a Corporate subscriber, the PRAN Card will either be sent to the subscriber's registered address or at the Corproate Head Office as per the option selected by the Corporate. 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.
Subscribers registered through a Corporate may please check with their office/service provider for the status of request on the basis of receipt no. (if provided) needs to be checked with the respective POP / Corporate.
Can a subscrber obtain/use more than one PRAN?
No, multiple NPS accounts for a single individual are not allowed and there is no necessity also as the NPS is fully portable across sectors and locations.
Is online registration possible?

Yes. PRAN can be generated online. For further details the Subscriber is required to contact the POP providing this facility.
Is selection of investment option - Auto or Active choice mandatory?

Yes, but in case investment option is not mentioned, all contributions would be channelled into auto choice, a Lifecycle fund. However, investment option can be changed subsequently only once in a financial year.
What are the different options in the IVR?
Subscribers have the following options in IVR
1.Change of T-PIN.
2.Check scheme preference and holding details.
3.Check the status of any change request (like change of address, nomination etc.).
4.Check details of last contribution credit and last withdrawal request(for Tier II only).
5.Request for SOT for last 3 financial years.
6. Check status of Subscriber Shifting
7. Speak to a customer service executive
Who can open a Tier II Account?
Any subscriber who has an active Tier I account can activate his / her TIER II account through his / her associated POP-SP. A subscriber can also open Tier I and Tier II together by filling up a composite application form.
Are bank details mandatory for Tier II account?

Yes, bank account details are mandatory for Tier II account. After a withdrawal request is processed in Tier II account , the funds are transferred by Trustee Bank to the subscriber's bank account as per these details.
Whether private employee covered under Employees Pension Scheme (EPS-95) or corresponding State Government Schemes will be eligible for contributing under NPS?

Yes, they can independently join NPS and contribute in Tier I and Tier II account.
If I have invested in any other Provident Fund, can I still invest in NPS?

Yes. Investment in NPS is independent of your contribution to any Provident Fund.
What is the use of I-PIN ?

The I-PIN is the credential provided to the Subscriber for accessing their NPS account online at www.cra-nsdl.com .


  • Guidelines for Online Registration
  • NPS Trust welcomes you to 'eNPS' ,which will facilitate:-

    ➤  Opening of Individual Pension Account under NPS (only Tier I / Tier I & Tier II)
    ➤  Making initial and subsequent contribution to your Tier I as well as Tier II account

    For Account opening, you need to:

    ✔  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).To view the list of empanelled banks, click here
    ✔  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


    All NPS subscribers can contribute in Tier I & Tier II account through 'eNPS' using SBI ePay. To view the list of Banks associated with SBI ePay, click here.

    Kindly note that eNPS facility cannot be used for enrollment under Atal Pension Yojana (APY)

    For any queries, please write to enps@nsdl.co.in
    Apply online visit https://enps.nsdl.com/eNPS/NationalPensionSystem.html 

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