Calculate monthly Pension & Tax Benefits through Cleartax NPS Calculator
1. NPS (National Pension Scheme) :Overview
The National Pension Scheme was launched by Government of India in January 2004 to provide market-linked returns to pensioners. Initially the scheme was meant to serve only government employees. However, the Pension Fund Regulatory and Development Authority (PFRDA) later extended the scheme to every Indian citizen in 2009. Hence, every self-employed individual and private sector employee can avail the benefits of NPS.
2. NPS through HDFC Bank: Features and Benefits
There are various benefits that one can avail through NPS when applied via HDFC Bank. Let us take a look at the features and benefits.
Risk assessment – since the NPS provides a 50% cap on equity exposure, it braces the risk-return equation for the investors. This keeps the corpus protected from the volatility of equity market.
- Regulated – NPS is a scheme launched by the Pension Fund Regulatory and Development Authority (PFRDA) under the government of India.
- Tax Benefit – Save income tax up to Rs. 1.5 Lacs under Section 80C. One can also enjoy additional deduction of Rs. 50,000 under Section 80CCD (1B).
- Minimal contribution – The minimum deposit you need make for having an NPS account is just Rs. 500 per month or Rs. 6000 per year.
- Two accounts – NPS offers 2 types of accounts – Tier I and tier II. Tier I is a mandatory investment and both differ in terms of money withdrawn from them. You are not allowed to withdraw money from Tier I account till you retire. Even there are some limitations when you withdraw on retirement. On the other hand, there is no limit to withdrawal from Tier II account. The subscriber can entirely withdraw the money from Tier II account.
3.Eligibility Criteria for HDFC’s National Pension Scheme
NPS through HDFC Bank is open for any Indian citizen.
- The individual must be in the age group of 18 to 60
- The applicant must be KYC compliant.
- The applicant must not have an existing NPS account.
4. Step-by-step guide to open an NPS account through HDFC Bank
- If you are already a user of HDFC securities, login using your trading id and password at here
- If not, then create a new HDFC account to get access to HDFC website.
- After login, click on “online NPS” option.
- Fill up the form with your personal details and send it to the HDFC branch located near you along with your KYC documents attached.
- You will be asked to pay Rs. 500 during the application.
- When the bank confirms your KYC details, Permanent Retirement Account (PRA) is created and “Unique Permanent Retirement Account Number (PRAN)” will be allotted where an individual can have only 1 PRAN