Introduced by the Pension Fund Regulatory and Development Authority (PFRDA), the framework covers platform workers such as delivery partners, drivers and other service providers working through digital platforms.
How can gig workers join NPS?
Platform workers can register for NPS through their platform’s app, where the facility is available. Points of Presence (PoPs) and Central Recordkeeping Agencies (CRAs) have also enabled digital registration and KYC processes.
Once the enrolment process is completed, the worker receives a Permanent Retirement Account Number (PRAN). The account belongs to the individual, which means it is not tied to a particular platform.
A worker can therefore continue with the same NPS account even after changing platforms. Freelancers and self-employed individuals who are not part of a platform can access NPS through the All Citizen Model.
Who can contribute?
Under the e-Shramik model, contributions can come from the worker, the platform aggregator or both. Any contribution from the platform would depend on its own policy.
According to Rajesh Khandagale, Senior Vice President – NPS, KFin Technologies, an NPS Tier-I account can be initiated with micro-contributions, with ₹10 being an illustrative minimum under the standard Tier-I structure. There is no prescribed upper investment limit.
Can contributions be changed or paused?
NPS allows subscribers to vary their contribution rather than committing to a fixed amount every month. This can be useful for workers whose earnings fluctuate.
Charu Pahuja, CFPCM, Director & COO, Wise Finserv, suggests a percentage-based approach. A worker could, for example, set aside 10% of income, allowing the contribution to rise in stronger earning months and fall when income is lower.
However, an NPS Tier-I account cannot be left without a contribution indefinitely. Khandagale said at least one contribution must be made within 365 days; otherwise, the account becomes dormant.
What are the tax benefits?
Eligible taxpayers under the old tax regime can claim deductions for NPS contributions under Section 80CCD(1), subject to applicable limits. An additional deduction of up to ₹50,000 is available under Section 80CCD(1B), subject to the relevant conditions.
The treatment of personal NPS contributions differs under the new tax regime. Therefore, the tax benefit depends on the tax regime and the subscriber’s eligibility.
Pahuja advises treating the tax benefit as an additional advantage rather than the primary reason to invest. The main objective remains retirement savings.
How is the NPS corpus paid out?
NPS is designed to build a retirement corpus over the long term. Under the current rules cited by Khandagale, at age 60, up to 80% of the accumulated corpus can be withdrawn as a lump sum, while at least 20% is used to purchase an annuity that provides regular pension income.
The annuity income is taxable according to the applicable income-tax slab. If the corpus is below ₹8 lakh, the entire amount can currently be withdrawn as a lump sum, according to the response.
Subscribers should check the rules applicable at the time of exit, as NPS regulations can change.
Should gig workers rely only on NPS?
Not necessarily. NPS can be used as the retirement-focused part of a broader financial plan.
Pahuja recommends keeping an emergency fund separately, given the uncertainty around gig income. She suggests maintaining at least six months of essential expenses in liquid savings, with a larger buffer where income is particularly volatile.
Other investments can serve different purposes. PPF can provide a relatively conservative component, while equity mutual funds can offer long-term growth potential and greater liquidity.
The right mix will depend on the worker’s age, income, risk appetite and financial goals.
