Top Questions on NPS| Answered!

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Nirav Karkera is the Head of Research at Finity. He is known to look beyond just numbers and identify wealth-creation opportunities in the Indian capital markets. A former U.S. Oil & Gas, Chemicals credit analyst with a globally-renowned credit rating agency, he has a penchant for translating dynamic economics into wealth propositions. Nirav specializes in generating risk-optimal wealth for investors through strategic as well as tactical play with equity and fixed income assets. He is up, anytime, for an intellectual debate around anything that pertains to business, economics & wealth. He can be reached at

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Hello everyone so here’s an interesting piece.
We have collected invested queries and listed down the most commonly asked questions around the National Pension System.
So let’s dive deep into it and answer the most frequently asked questions around NPS.
So with me, I have a question

1. How can one save tax through NPS?

The answer is simple, you can save up to 1 lakh 50 thousand under section 80 C and once it is exhausted you can save additional 50,000 under section 80CCD getting the total to INR 2 lakhs.

2. What is a PRAN?

PRAN is basically Permanent Retirement Account Number. It is a 12 digit account number used to identify your NPS account. So that is what a PRAN is, generally issued to you by the PFRDA.
Through Finity, it can reach you in a short period of time.

3. What happens if I don’t make the minimum contribution?

So if you do not do a minimum contribution your account will be frozen, however, do not worry you can unfreeze it by paying Rs.100 to the point of presence through which you have made an NPS investment.

4. Will the Government also contribute to my NPS account?

We truly wish but NO, that is not the case you are the only contributor into the NPS account.

5. Can I change my investment choice, fund manager and scheme?

So while it’s generally not required in an NPS. YES, you do have an option to change your allocation to change your pension fund manager but only once in a financial year.

6. What happens if the subscriber dies at the age of 60 and what are the tax implications?

So the entire accumulated wealth to an NPS account will be passed on to the legal heir and the amount that has been passed on will be completely tax-free in his/ her hands.

7. How is annuity income taxed?

So annuity income will be considered as a normal income added to your total income and taxed at your normal tax rate prevailing at the time when you receive your annuity income.

8. What rate of return will I receive on my NPS investments?

So as you would have understood you get to choose your asset allocation into equity corporate bonds and government bonds. Each of these asset categories have various, differential and volatile return rates. So NPS does not offer you a fixed return but the asset allocation option that definitely ensures that you achieve very good returns over a longer period in time.

So these were the top questions asked by our investors. I hope it has helped you, in case you have any further questions feel free to write it down in the comment and we would address it for you.

So meanwhile like I always say “The best time to invest on retirement is while your still young” and the best way to do it is through Finity app start investing right now for a brighter tomorrow.

So guys as a quick recap we know all it takes is a Rs.500 to start an NPS account and secure your retirement. You also know it offers very good tax benefit today and at the same time, you have a variety of pension fund managers to choose from.

So what are you waiting for as I always say “The best time to invest on retirement is while your young” and the best way to do it is through Finity app.