National Pension Scheme for Traders and Self Employed Persons

Prime Minister Narendra Modi launched the National Pension Scheme for Traders and Self Employed Persons on September 12, 2019. This pension scheme is for the retail traders, shopkeepers, and self-employed persons with an annual turnover below Rs.1.5 crore.

National Pension Scheme for Traders and Self Employed Persons

National Pension Scheme for Traders and Self Employed Persons is a government scheme aimed at providing old age protection and social security to small scale traders and retailers.

It is a pension scheme for the Vyaparis (retail traders/shopkeepers and self-employed persons) with an annual turnover below Rs.1.5 crore.

In this post, let take a look at the features and benefits of this National Pension Scheme for Traders and Self Employed Persons.

Features of NPS-Traders

This is a voluntary and contributory pension scheme. Under this Yojana, the subscriber will receive a minimum assured amount of Rs.3000/- monthly on attaining the age of 60 years. If the subscriber dies, the spouse of the beneficiary entitled to receive 50% of the amount as family pension. Family pension is applicable only to spouse.

1. On the maturity of this scheme, the subscriber will be entitled to receive an assured pension of Rs.3000/- month. This pension amount helps pensioners to aid their financial requirements.

2. This scheme is a tribute to the workers in the unorganized sectors who contribute around 50% of the GDP.

3. The subscribers within 18 to 40 years of age group will have to make monthly contributions ranging between Rs.55 to Rs.200 per month till they attain the age of 60. The Central Government will also make a matching contribution.

4. Once the beneficiary attains the age of 60, he/ she can claim the assured pension of Rs.3000/- month. Every month the amount gets deposited in the account of the respective individual.

5. The monthly contribution amount is kept low to make it affordable. For example, a beneficiary of 29 years of age at the entry time is required to contribute as little as Rs.100/- per month.

Eligibility Criteria for NPS-Traders

The following eligibility criteria shall be applicable for the National Pension Scheme for Traders and Self Employed Persons:

1. Vyaparis, who are self-employed and are working as shop owners, retail traders, oil mill owners, rice mill owners, workshop owners, commission agents, real estate brokers, small hotel owners, restaurant owners and other Vyaparis with similar occupations with an annual turnover below Rs.1.5 crore.

2. He/ She should be within the age group of 18 to 40 years.

3. Annual turnover should not exceed Rs.1.5 crore.

4. The beneficiary should have an Aadhaar card.

5. He / She should have a savings bank / Jan-dhan account passbook only.

6. GSTIN required only for those with turnover above Rs.40 lakhs.

7. An income tax payer is not eligible for this Yojana.

8. He / She should also not be covered under any NPS contributed by the Central Government.

9. He / She should also not be a member of EPFO/ESIC/NPS (Govt.)

10. The beneficiary should not be enroled under Pradhan Mantri Shram Yogi Maandhan Yojana or Pradhan Mantri Kisan Maandhan Yojana.

Benefits under NPS-Traders

As stated above, after attaining the age of 60 years, you would receive an assured pension of Rs 3000/- per month till the death. Following are the other benefits which you also need to know.

1. Benefits to the family on death of an eligible subscriber

During the receipt of the pension, if an eligible subscriber dies, the spouse of the beneficiary entitled to receive 50% of the amount as family pension. The family pension shall be applicable only to the spouse.

2. Benefits on disablement

If an eligible subscriber becomes permanently disabled due to any cause before attaining his age of 60 years and is unable to continue to contribute under the Yojana, his spouse shall be entitled to continue with the scheme by paying regular contribution as applicable. Can also opt to exit the scheme by receiving the share of contribution deposited by the subscriber, with interest as earned by the Fund or the interest at the savings bank interest rate, whichever is higher.

3. Benefits on Leaving the Scheme

a) If an eligible subscriber exits within a period of less than 10 years, then the share of contribution paid by him only returned to him with savings bank rate of interest.

b) If an eligible subscriber exits this scheme after completion of a period of 10 years or more but before his age of sixty years, then his share of contribution only shall be returned to him along with interest as earned by the Fund or the interest at the savings bank interest rate, whichever is higher.

c) If an eligible subscriber died due to any cause. His spouse entitled to continue with the Yojana by paying regular contribution as applicable. Can also opt to exit by receiving the share of contribution paid by such subscriber along with interest as earned by the Fund or at the savings bank interest rate, whichever is higher

d) After the death of the subscriber and his or her spouse, the corpus credited back to the fund.

Monthly Contribution Chart

Below is the monthly contribution chart by an individual. As stated above, the Central Government will also make a matching contribution.

How to apply for NPS-Traders?

Follow the steps given below to apply for the National Pension Scheme for Traders and Self Employed Persons.

1. Visit the nearest CSC (Common Service Center). Alternatively, you can also enroll online by visiting the portal www.maandhan.in/vyapari.

2. Go with your Aadhaar Card and Savings/Jan Dhan Bank Account details along with IFSC Code.

3. You need to pay the initial contribution amount in cash to the Village Level Entrepreneur (VLE).

4. The VLE will key-in the Aadhaar number, Name and Date of birth as printed on Aadhaar card for authentication.

5. Now, the VLE will complete the online registration by entering the details like Bank Account Number, Mobile Number, Email Address, GSTIN, Annual Turnover Income, Spouse (if any) and Nominee details.

6. Next, self-certification for eligibility conditions.

7. Now the system will automatically calculate monthly contribution payable according to your age.

8. Here, you will pay the first subscription amount in cash to the VLE.

9. Print the Enrollment cum Auto Debit mandate form and sign it. VLE will scan the duly signed form and upload it into the system.

10. A unique Vyapari Pension Account Number (VPAN) generated and Vyapari Card printed.

Also Read: List of Banks in India

Also Read: National Savings Certificate (NSC)

Final Thoughts

At the time of enrollment, you need to have an Aadhaar card and a saving bank/ Jan-dhan Account passbook only. The enrolment under the National Pension Scheme for Traders and Self Employed Persons is free of cost for the beneficiaries. The enrolment is based upon self-certification. The pension under this scheme will be provided by the Life Insurance Corporation (LIC) of India.

Note: This post was originally published on September 17, 2019 and has been completely updated for accuracy and comprehensiveness.

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