Post Office National Pension System: Income Tax Benefits, Transaction Charges, Other Details

Post Office National Pension System: Income Tax Benefits, Transaction Charges, Other Details

India Post or Department of posts, which runs the postal network of the country, also offers the facility of opening accounts under National Pension System (NPS). NPS or National Pension System is defined as a contribution pension system that provides social security to all citizens of the country. It is administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA). Under this system, contributions from subscribers along with matching contributions from respective governments as an employer, are collected and accumulated in an individual pension account, which is identified by Permanent Retirement Account Number (PRAN).

Given below are salient features of Post office National Pension System (NPS):
Services offered
India Post allows subscribers to open new NPS (all citizens model) account and make subsequent contributions. All types of service requests and exit / claim withdrawal requests are also offered, stated India Post its official website-indiapost.gov.in.
Eligibility
All citizens who do not come under any NPS sector and are aged between 18 and 64 years of age can open an NPS account with post office, it noted.
Types of accounts
There are two types of accounts that are opened under NPS: Tier I and Tier II. Tier I is a pension account and is mandatory. Tier II is a savings account and is optional.
Finance cap on NPS accounts
Minimum Initial Contribution with registrationRs. 500 (excluding taxes)
Minimum Subsequent ContributionRs. 500 (excluding taxes)
Maximum ContributionsNo limit
Minimum Contributions in a Financial YearRs.1,000 in Tier I
Minimum transactions in a Financial YearOne
Transaction charges
Registration ChargesRs. 200 (excluding taxes).
0.25 % of the Contribution amount subject to minimum of Rs.20 (excluding taxes) and maximum of Rs.25,000 (excluding taxes)
All Service ChargesRs. 20 (excluding taxes)
Payment modeCash, Cheque, DD subject to realization
Income Tax benefits
There is an additional tax benefit up to Rs. 50,000 for investment in NPS (All Citizen Model), said India Post.
Source - NDTV












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