Maximum age of joining NPS raised to 65

The government Wednesday increased the maximum age of joining the National Pension System (NPS) to 65 years from existing 60 years.

The initiative is expected to benefit senior citizens plan for their regular income.

"Now, any Indian citizen, resident or non-resident, between the age of 60 and 65 years, can also join NPS and continue up to the age of 70 years in NPS. With this increase of joining age, the subscribers who are willing to join NPS at the later stage of life will be able to avail the benefits of NPS," an official statement said.

The subscriber joining NPS beyond the age of 60 years will have the same choice of the Pension Fund as well as the investment choice as is available under the NPS for subscribers joining NPS before the age of 60 years, it said.

Subscriber joining NPS after the age of 60 years will have an option of normal exit from NPS after completion of 3 years in NPS. In this case, the subscriber will be required to utilize at least 40% of the corpus for a purchase of the annuity and the remaining amount can be withdrawn in lump-sum, the statement said.

In case of such subscriber willing to exit from NPS before completion of 3 years in the NPS, he/she will be allowed to do so, but in such case, the subscriber will have to utilize at least 80% of the corpus for purchase of annuity and the remaining can be withdrawn in lump-sum, it said.

In case of unfortunate death of the subscriber during his stay in NPS, the entire corpus will be paid to the nominee of the subscriber.

NPS has been under attack for its taxation system. Only 40% of the NPS corpus can be withdrawn tax-free at the time of withdrawal. Another 20% is taxable at the marginal rate. The remaining 40% has to compulsorily be invested in an annuity to earn a monthly pension.