FAQs on NPS

  • What is National Pension System (NPS)?
  • What is meant by 'Defined Contribution' scheme?
  • Who can subscribe in NPS?
  • Can an NRI join NPS?
  • What are the prerequisite for NRI to join NPS?
  • Can an Indian citizen having dual citizenship join NPS?
  • What is PRAN?
  • What is PRAN Kit?
  • What is PRAN Card?
  • What is the use of T-Pin?
  • What is the use of I-Pin?
  • Who are the intermediaries in NPS architecture and what are their roles?
  • Can I open multiple NPS accounts?
  • Can I open an NPS account jointly with my spouse, child, relative, etc?
  • What is the complete NPS scheme process?
  • Does NPS comes under 80ccd investment?

NPS is an easy-to-use, low cost, tax-efficient, flexible and portable retirement savings account. This defined contribution based pension scheme is a Government of India initiative to provide old age security and pension requirement to all citizens of India. The NPS was rolled out for Indian Citizens on May 01, 2009.

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).

Scheme where returns are not guaranteed are called defined contribution scheme. The returns under NPS are market driven. The returns generated through investments are accumulated and is not distributed as dividend or bonus.

Any citizen of India in the age group of 18-60 years (as on the date of submission of NPS application to Kotak Mahindra Bank branch) can join NPS. OCI (Overseas Citizens of India) and PIO (Person of Indian Origin) card holders and HUFs are not eligible.

Yes, an NRI can also join NPS. NRIs are requested to get in touch with Kotak Mahindra Bank Branch for further details.

NRI should have an account with a bank in India to open an account under NPS. The contribution made by an NRI is subject to regulatory requirements as prescribed by RBI from time to time and FEMA requirements. NRIs are requested to get in touch with Kotak Mahindra Bank branch for further details.

Yes. Till the person carries valid Indian Passport, he / she is eligible to join NPS.

PRAN is Permanent Retirement Account Number which is allotted to the subscriber by Government of India upon successful registration to NPS.

It’s a Welcome Kit containing PRAN card, Subscriber details (referred as Subscriber Master List) and an information booklet sent to the subscriber's registered address by CRA. The T-Pin and I-Pin are sent separately to the registered address.

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.

Subscribers can call at CRA's (NSDL) toll free number 1800 222 080 and access the Interactive Voice Response (IVR) or speak to customer service executive using the T-PIN (Telephonic Personal identification Number.

Subscribers can log in to CRA website using I- Pin (Internet Pin) which is a unique ID and Password and access his / her NPS account details including investment details.

Below are the details of intermediaries and their roles in NPS Architecture

  • POP (Point of Presence): POP is responsible for processing all sorts of service requests raised by the subscriber including new subscriber registration. POP acts as the first point of contact for NPS subscriber under NPS architecture. Branch offices of POP are known as Facilitation Centre (POP – SP). Kotak Mahindra Bank acts as POP.
  • Central Recordkeeping Agency (CRA): CRA is responsible for recordkeeping, servicing of customer requests, issuance of PRAN card and Welcome KIT etc. NSDL is CRA in NPS architecture.
  • Pension Fund Manager (PFM): PFM is responsible for investment of contribution amount deposited by the subscribers. Kotak Mahindra Pension Fund Limited is Pension Fund Manager.
  • Custodian: Stock Holding Corporation of India Limited (SCHIL) acts as Custodian in NPS architecture. The entity is responsible for holding and safeguarding assets of the NPS Trust.
  • Trustee Bank: Trustee Bank is an interface with CRA and Pension Fund Managers. It manages the banking of Pension Funds in accordance with applicable provisions of NPS.
  • NPS Trust: The Trust monitors the working of each and every entities / intermediaries operating under NPS architecture.
  • Regulator: PFRDA (Pension Fund Regulatory and Development Authority)

Annuity Service Provider: Subscriber, post maturity of NPS Account, would buy Annuity plan of his / her choice from any of the PFRDA registered Annuity Service Providers.

Opening multiple NPS accounts for same individual is not allowed under NPS rules.

NPS account can be opened only in individual capacity and cannot be opened or operated jointly.

Any citizen of India in the age group of 18-60 years (as on the date of submission of NPS application to Kotak Mahindra Bank branch) can join NPS. OCI (Overseas Citizens of India),PIO (Person of Indian Origin) card holders and HUFs are not eligible.

The subscriber can fill an application online and submit the required documents to a Kotak Mahindra Bank representative and get started with the process.

Upon successful registration to NPS, a Permanent Retirement Account Number (PRAN) is allotted to the subscriber by the Government of India. Once the PRAN is generated, an email alert as well as a SMS alert is sent to the registered email ID and mobile number of the subscriber by NSDL (Central Record Keeping Agency). PRAN Card is dispatched to the registered address within 20 days from the day of PRAN generation by NSDL (CRA – Central Record keeping Agency). During this period, a subscriber can visit www.cra-nsdl.com/CRA/ and check the status.

Yes, NPS does come under 80CCD investment

  • You can save additional tax by investing Rs. 50,000/- in an year under sec 80 CCD(1B) over and above the Rs. 1.5 Lakh limit under sec 80 C.