Types of NPS Accounts
Tier I and Tier II accounts are the two major account categories within the NPS. The latter is an extra addition, whereas the first is the default account. The details of the two account categories are provided in the table below.
Particulars |
NPS Tier-I Account |
NPS Tier-II Account |
---|---|---|
Status |
Default | Voluntary |
Withdrawals |
As per the rules and regulations | Permitted |
Tax exemption |
Up to ₹2 lakh p.a.(Under 80C and 80CCD) | ₹1.5 lakh for government employees Other employees-None |
Minimum NPS Contribution for opening an account |
₹500 | ₹1,000 |
Minimum NPS Contribution |
₹500 per month or ₹1,000 p.a. | ₹250 |
Maximum NPS Contribution |
No limit | No limit |
Tier-I accounts are required for all participants in the NPS program. The minimum contribution required of Central Government employees is 10% of their base salary. Investment in the NPS is a voluntary choice for all other individuals.
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