Tax benifit and service charges for NPS

Presently, the tax treatment for contribution made in Tier I account is Exempted-Exempted-Taxed (EET) i.e., the amount contributed is entitled for deduction from gross total income upto Rs.1.00 lakh (along with other prescribed investments) as per section 80C (as per the provisions of the Income Tax Act, 1961 as amended from time to time). The appreciation accrued on the contribution and the amount used by the subscriber to buy the annuity is not taxable. Only the amount withdrawn by the subscriber after the age of 60 is taxable. CHARGES All the charges associated to Tier I account including Annual PRA Maintenance charge are paid by the employer. In case of Tier II account, activation charge and transaction charges are paid by the subscriber. The POP charges and the CRA charges are given in the table below: Intermediary Charge head Service charges* Method of Deduction CRA PRA Opening charges Rs.50 Through cancellation of units at the end of each quarter. Annual PRA Maintenance cost per account Rs.190 Charge per transaction Rs.4 POP (Maximum Permissible charge for each subscriber) Initial subscriber registration Rs.100 To be collected upfront Initial contribution upload 0.25% of the initial contribution amount from subscriber subject to a minimum of Rs.20 and a maximum of Rs.25,000/- Any subsequent transaction involving contribution upload 0.25% of the amount subscribed by the NPS subscriber, subject to minimum of Rs.20/- and a maximum of Rs.25000/-. Any other transaction not involving a contribution from subscriber Rs.20 *Service tax and other levies, as applicable, will be levied as per the existing tax laws. RELATED LINKS Pension Fund Regulatory and Development Authority (PFRDA) - Ministry of Finance - Insurance Regulatory and Development Authority (IRDA) - NPS Architecture - Central Recordkeeping Agency for NPS -