Pension plans provide financial security and stability during old age when people don't have a regular source of income. Retirement plan ensures that people live with pride and without compromising on their standard of living during advancing years. Pension scheme gives an opportunity to invest and accumulate savings and get lump sum amount as regular income through annuity plan on retirement.
Let's see the comparison or difference between National Pension scheme(NPS) and Atal Pension Yojana(APY). I believe this article should help you to understand about the NPS and APY pension schemes. After read this article you come to know which plan is better to invest based on your need.
Basic information about the plan
| |
NPS
|
APY
|
| Government of India established Pension Fund Regulatory and Development Authority (PFRDA) - External website that opens in a new window on 10th October, 2003 to develop and regulate pension sector in the country. The National Pension System (NPS) was launched on 1st January, 2004 with the objective of providing retirement income to all the citizens. NPS aims to institute pension reforms and to inculcate the habit of saving for retirement amongst the citizens. The subscriber will be allotted a unique Permanent Retirement Account Number (PRAN). This unique account number will remain the same for the rest of subscriber's life. This unique PRAN can be used from any location in India. |
The Atal Pension Scheme will bring security to ageing Indians while at the same time promote a culture of savings and investment among the lower and lower middle class sections of society. One of the greatest benefits of the scheme may be enjoyed by the poorer sections of society. The government of India has decided to contribute 50 percent of the user's contribution or INR 1,000 a year (whichever is lower) for a period of five years. This contribution will, however, be enjoyed only by those who are not income tax payers and those who join the scheme before 31 December 2015.
|
Who can join this plan?
| |
NPS
|
APY
|
All citizens of India between the age of 18 and 60 years as on the date of submission of his / her application to Point of Presence (POP) / Point of Presence-Service Provider (POP-SP) can join NPS.
|
The Atal Pension Yojana (APY) is open to all Indians between the age of 18 and 40. This allows an individual to contribute for at least 20 years before reaping the benefits of the scheme. Any bank account holder who is not a member of any statutory social security scheme can avail of the scheme. All existing members of the government's 'Swavalamban Yojana NPS Lite' will automatically be migrated to the Atal Pension Yojana. It will now replace the Swavalamban scheme, which did not gain much popularity across the country.
|
Min and Maximum Contribution of plan
| |||||||||||||||||||||||||||||||||||||||||||||||||
NPS
|
APY
| ||||||||||||||||||||||||||||||||||||||||||||||||
To contribute in Tier I and Tier II account, a subscriber is required to make his / her first contribution at the time of applying for registration (minimum contribution Rs.500 for Tier I and Rs.1000 for Tier II) at any POP-SP.
For Tier I, minimum contribution requirements are:
· Minimum amount at the time of Account opening - Rs.500· Minimum amount per contribution - Rs.500 · Minimum contribution per year - Rs.6,000 · Minimum number of contributions in a year - one
For Tier II, minimum contribution requirements are:
· Minimum contribution at the time of account opening - Rs.1000· Minimum amount per contribution - Rs.250 · Minimum number of contributions in a year - one · Maintain minimum balance of Rs.2000 at the end of each financial year
No maximum limit has been mandated for NPS (both Tier I and Tier II).
|
There are five plans under this scheme. You can avail any of the plan as per your choice. Each plan offers different pension at different age and you will have to contribute different amount of money. The monthly pension will be received by the user and his spouse. The indicative return which needs to be given to the nominee of subscriber is also mentioned in the table. For example: If you wish to get a pension of Rs. 3000 per month and you are 30 years old, then you will need to contribute Rs. 347 per month for 30 years.
Contribution with various options:
| ||||||||||||||||||||||||||||||||||||||||||||||||
Withdrawal Norms of Plan
| |
NPS
|
APY
|
There is a requirement for subscribers who leave the scheme before retirement (or age 60, whichever is the earlier) to invest 80% of their accumulated savings in a life annuity from a life insurance company approved by Insurance Regulatory and Development Authority (IRDA). The remaining 20% is eligible for withdrawal as a lump sum. On retirement, at age 60, subscribers are required to invest at least 40% of their pension fund in an annuity and the remaining 60% can be redeemed as a lump sum. In the case of government employees, the annuity provides for pension for the lifetime of the employee and his dependent parents and spouse at the time of retirement. Subscribers may remain in the scheme after their 60th birthday for the purpose of receiving interest on their account, but may not make further contributions after that date. If a subscriber does not exit the system on or before their 70th birthday, the account is closed and the benefits are transferred to the subscriber as a lump sum. If a subscriber dies, the nominee has the option to receive the account total as a lump sum.
|
Under ordinary circumstances, an account holder who has enrolled for the Atal Pension Yojana will not be able to exit the scheme before the age of 60. Exiting the scheme is only possible in special circumstance such as in the event of the death of the beneficiary.
|
Is it required bank account for this plan?
| |
NPS
|
APY
|
Not required
|
Yes
|
TAX Exemption
| |
NPS
|
APY
|
YES. The scheme permits subscribers to benefit, as applicable, under the Income Tax Act (1961). As of 2015, this means that up to a variable limit, contributions to the scheme are tax-exempt, but that withdrawals are counted as taxable income (EET). These tax benefits apply to all contributions, including those made by employers. From tax year 2012-13, employers contributions and employee contributions have been treated separately for tax purposes, an arrangement that permits employer contributions to rise without affecting employee tax liability.
|
No
|
How to Pay?
| |
NPS
|
APY
|
Through Net banking. You can make contributions to your NPS account from netbanking like SBI,HDFC etc. You need to provide PRAN number to transfer money from your savings bank account to your NPS.
|
The Contributed amount directly debit from your bank account as per the schedule.
|
When the Plan was launched?
| |
NPS
|
APY
|
The National Pension System (NPS) was launched on 1st January, 2004 with the objective of providing retirement income to all the citizens and the Updated New Pension System was introduced on 1st May 2009.
|
It will be launched form 1st June 2015 and the existing members of the Swavalamban scheme would be automatically transferred to this scheme. The scheme intends to bring pension benefits to allow people of the unorganised sector to enjoy social security with minimum contribution per month.
|
What all are the Important Benefits?
| |
NPS
|
APY
|
Income Tax Act allows benefits under NPS as per the following sections, Section 80CCE provides that the aggregate amount of deduction under Section 80CCC and 80CCD shall not exceed Rs 1 lakh. The Finance Act, 2011 provides that contribution made by the Central Government or any other employer to NPS shall be excluded while computing the limit of Rs 1,50,000. The contribution by the employee to the NPS will be subject to the limit of Rs 1,50,000. Section CCD (2) provides that deduction in respect of contributions by the Central Government or any other employer to NPS available under Section 80CCD (2) will not be subject to the limit specified in Section 80CCE but it is subject to 10% of Basic + DA maximum. The tax benefits are available only in the case of Tier I account not in Tier II account.
|
It is the government who has taken the guarantee for giving benefits under this scheme. One of the most important part of this scheme is that, the central government will contribute 50% of the user's contribution or Rs. 1000 per year for a period of 5 years. This benefit of government's contribution is limited to all those members only who will join the National Pension Scheme before 31st December 2015 and who are not income tax payers.
|
Can a subscriber get loan under this Plan?
| |
NPS
|
APY
|
No. At present, a subscriber cannot avail a loan against his / her NPS holdings
|
No. At present, a subscriber cannot avail a loan against his / her APY holdings
|
How to Contact?
| |
NPS
|
APY
|
Toll Free Number :
1800 110 708
|
Toll Free Number :
1800-180-1111 / 1800-110-001
|
0 comments:
Post a Comment