Just In: We have received the licence to offer National Pension System from PFRDA

Yes, you heard us right! We have received the approval to offer National Pension Scheme from the Pension Fund Regulatory and Development Authority (PFRDA). NPS (National Pension System) is a government sponsored pension scheme. With this, all registered users of Paytm Money will be able to invest in NPS within minutes! All the 8 major Pension Fund Managers, namely:

1. LIC Pension Fund,
2. SBI Pension Fund,
3. UTI Retirement,
4. Reliance Capital Pension Fund
5. HDFC Pension Fund
6. ICICI Prudential Pension Funds Management
7. Kotak Mahindra Pension Fund
8. Birla Sun Life Pension Fund

will be available on Paytm Money.

Who is NPS for?

NPS is a smart way to save up for your retirement. Additionally, you can avail tax benefits over & above the limit allowed of Rs. 150,000 under Section 80 C by the Income Tax Act, 1961.

How does it work?

1. You can contribute to this scheme regularly across different asset classes such as Equity, Corporate debt and Government Securities.
2. At the time of retirement, you can withdraw a part of the corpus as a lumpsum and use the remaining amount to buy an annuity to secure a regular income after retirement.
3. You will be issued a 12-digit unique number called Permanent Retirement Account Number also known as PRAN.
4. You can open Tier 1 and Tier 2 accounts (both linked to a common PRAN), the former is a mandatory account which you cannot withdraw from, until retirement.

Please know that only on Tier 1 accounts, you can avail tax benefits of an additional Rs 50,000 under Section 80CCD (1B), over & above the overall ceiling of Rs 1.5 lakh under Section 80C, the Income Tax Act, 1961.

However, Tier 2 accounts can be opened on a voluntary basis. You can withdraw the entire amount, even before retirement, but you receive no tax benefits.

This is meant to encourage retaining money in these accounts. Low fund management costs, good track record of returns and tax benefits, render NPS as a lucrative investment avenue.

Watch this space for more announcements about the official launch of NPS functionality on the Paytm Money app.