National Pension Scheme (NPS) is contribution (voluntary) retirement scheme introduced by the Government of India which allows subscribers to contribute some amount on a monthly basis as a systematic savings during his/her working career. It was introduced on January 1st, 2004 aiming at the newly employed individuals working with the government, excluding the likes of people related to the defense sector. However, it was made available for every citizen of India aged between 18 and 60 in 2009.
At the time of subscribing for NPS, each will be provided with Unique Permanent Retirement Account Number (PRAN) along with a set of two NPS accounts namely Tier I Account and Tier II Account.
|Mandatory deduction from salary towards retirement||Rs.1.5 lakh||80CCD (1)|
|Voluntary contribution towards NPS by employer||10% of basic salary||80CCD (2)|
|Voluntary contribution towards NPS made by employer||Rs.50,000||80CCD (1b)|
It is the reframed version of the National Pension Scheme introduced by the Government of India which allows all the citizens of India (employees) whether working in public sector or in the private one to open an account for NPS.
New Pension Scheme is applicable for all the Indian Citizens even if they are NRIs. However, there are some eligibility criteria for applying to this scheme.
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