The Pension Fund Regulatory and Development Authority (PFRDA) is observing October 1 as the National Pension System (NPS) Diwas to promote pension and retirement planning among the citizens of India. For the same, PFRDA has kickstarted a campaign under ‘Azadi Ka Amrit Mahotsav’ and is promoting the campaign on its social media platforms.
The pension regulator aims to encourage every citizen (working professionals and self-employed professionals) to plan towards creating a pension corpus to ensure for onself a financially sound future after retirement.
NPS subscribers will enjoy the benefits of tax deduction on contribution, power of compounding and reap the benefits of regular income after retirement, PFRDA said in a statement.
PFRDA Chairperson Shri Supratim Bandyopadhyay said, "Through this campaign, we reiterate our commitment towards creating awareness about pension planning among the public. As a regulatory body, our foremost aim is to cover all eligible citizens under a pension scheme to fulfil the vision of a pensioned society for India.”
As on September 24, 2022, total number of subscribers under NPS is 571.86 lakhs (5.72 crores) and total Assets Under Management (AUM) is 7,99,467 crore (7.99 trillion).
About NPS
National Pension System or NPS, a government-run investment scheme, gives the subscriber the option to set the preferred allocation to different asset classes.
NPS offers two kinds of accounts — Tier 1 and Tier 2 — for instruments including government bonds, equity market, and corporate debt.
While the Tier 1 NPS account is strictly a pension account, the Tier 2 account — known as an investment account — is voluntary savings account associated with the Pension Regulatory Authority of India (PRAN).
Here are the benefits of investing in NPS:
Allows voluntary contributions
In NPS, a subscriber can contribute at any point of time in a financial year and also change the amount he/she wants to set aside and save every year.
Subscribers can choose their own investment options and pension fund and see their money grow.
Subscribers can operate their NPS account from anywhere, even if they change the city and/or employment.
Investment in a Tier 1 account of NPS offers income tax benefits. Any individual who is a subscriber of NPS can claim tax deduction up to 10 percent of gross income within the overall ceiling of Rs 1.5 lakh, under Section 80C of the Income Tax (I-T) Act.
An additional deduction for investment up to Rs 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs 1.
